Merrill's O'Neal talked merger with Wachovia

Merrill board irked by CEO E. Stanley O'Neal's unauthorized outreach, The New York Times reports.
OCT 26, 2007
Merrill Lynch & Co. Inc. chief executive E. Stanley O'Neal considered merging with Wachovia Corp. without first getting approval from Merrill's board of directors, according to a report in The New York Times. The board considers the merger overture a “major breach of corporate protocol," and its reaction may indicate that a merger with Charlotte, N.C.-based Wachovia was "not likely for now," noted people familiar with the situation. The board considers the merger overture a “major breach of corporate protocol." Talks occurred before Merrill reported a $7.9 billion third quarter write-down this week, resulting from losses in collateralized debt obligation investments this week, according to the report (InvestmentNews, October 24) . Mr. O'Neal called G. Kennedy Thompson, Wachovia's chairman and chief executive, just days before Merrill's board meeting last Sunday, according to the report. Mr. Thompson expressed interest in starting a conversation with Mr. O'Neal, while he acknowledged the difficulty of the deal. Merrill's board was so upset with Mr. O'Neal that it even discussed names of potential candidates to replace him, according to people with knowledge of the board's proceedings cited in the report. The candidates discussed included Laurence Fink, chairman and chief executive of BlackRock Inc., which is partially owned by Merrill, and John A. Thain, chief executive of NYSE Euronext Inc. Representatives of Merrill and Wachovia were not available to comment to the Times. CNBC television reported this morning that Mr. O'Neal has told friends that he expects to be booted by the end of the weekend.

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