S’pore’s Temasek raises stake in troubled Merrill

Written by Writer on Sunday, October 5th, 2008

S’pore’s Temasek raises stake in troubled Merrill

Temasek Holdings has increased its stake in Merrill Lynch from 8.85 per cent to 13.7 per cent, according to a United States regulatory agency.

A US Securities and Exchange Commission filing yesterday showed that Temasek now has 219.7 million shares in the Wall Street bank.

On May 15, Temasek made a filing stating that it owned 86.95 million Merrill shares as at March 31, a stake of 8.85 per cent, according to Bloomberg data on June 30.

Temasek declined to comment if 13.7 per cent was the final figure, but The Straits Times understands it comes after Temasek made another huge investment in Merrill in July.

The Singapore investment company is said to be the single largest investor in Merrill with this 13.7 per cent stake, after it injected about US$5.9 billion, or an average $23.11 a share, since last December.

Merrill has been caught up in the crisis affecting financial firms in the US. Two weeks ago, it agreed to be sold to Bank of America (BoA) in something of a fire sale.

BoA is paying $50 billion, or $29 per share, by exchanging 0.8595 BoA common stock for each Merrill share.

Temasek stands to reap a gain of about $1.5 billion if it takes up the BoA offer.

In August, Temasek said it doubled its full-year net profits to a record S$18 billion (US$12.54 billion), partly by selling off about S$17 billion (US$11.84 billion) of assets, including stakes in Tuas Power and Chinese banks.

It said these divestments armed it with the financial firepower to snap up investment opportunities, such as the investment in Merrill.

In the past, Temasek had said that its investment reflected its belief in the “strong growth potential” of Merrill.

BY : ASIA NEWS NETWORK