Stan O'Neal's grip on Merrill Lynch has weakened. Photo / Bloomberg
NEW YORK - Merrill Lynch's board is considering BlackRock chief executive Larry Fink and NYSE Euronext CEO John Thain as possible replacements for embattled Merrill chairman Stan O'Neal, according to people familiar with the situation.
Fink's candidacy has gathered steam because he is considered one of the top
US bond managers. He also is seen as someone who can remedy Merrill Lynch's fixed-income problems after the company wrote down US$8.4 billion ($10.9 billion), mostly because of bad bets on sub-prime loans and collateralised debt obligations.
Another possible contender is said to be Robert McCann, president of Merrill's global private client business.
McCann, in charge of Merrill's army of 16,610 brokers, is insulated from the turmoil dogging O'Neal. Revenue at his division, Merrill Global Private Client, surged 23 per cent to US$3.3 billion in the third quarter. And a flood of US$26 billion in net new client assets made for the division's strongest quarter in more than six years.
Thain has a blue-chip Wall Street resume, with credentials sharpened by running the NYSE and his time as a former co-president at Goldman Sachs Group.
A spokeswoman for BlackRock, an asset manager in which Merrill holds a large stake, declined to comment. The NYSE also declined comment.
Speculation that O'Neal would be ousted lifted Merrill shares US$4.42 to US$66.09 on the NYSE. The stock has fallen by 29 per cent this year.
O'Neal's grip on the firm weakened after the company announced on Wednesday that it wrote down US$8.4 billion and posted the biggest quarterly loss in the company's history in the third quarter.
Analysts say they've lost confidence in Merrill Lynch's risk management, and O'Neal admitted this week he had misjudged the company's exposure to sub-prime mortgages.
On Friday, the New York Times reported that O'Neal had floated a merger proposal with Wachovia before informing Merrill Lynch's board, angering some members.
The paper said Greg Fleming, Merrill's co-president and star investment banker, had helped make the overture, a move that could hurt his chances of rising in the company.
Merrill Lynch declined to comment.
- Reuters
