A
AliGabra
Guest
For once, I’ve read some positive news regarding Temasek’s investment in Merrill Lynch. The Financial Times of London has just announced a new wrinkle in the Temasek-Merrill deal, one that means well for Singapore:
The Singapore investor had negotiated a reset clause, which meant that if Merrill were to issue new stock at less than $48 a share within 12 months, the bank would compensate Temasek for the difference for each share held. The result was that Merrill had to hand back $2.5bn, which Temasek plans to re-invest immediately along with a fresh capital injection of $900m.
[...]
Temasek’s proposed $3.4bn holding in Merrill Lynch is subject to regulatory approval. Depending on the take-up of Merrill’s $8.5bn share offering, Temasek’s stake could rise from 9 per cent to closer to 15 per cent. Any holding above 10 per cent would require formal approval from US regulators.
This apparently means that Merrill Lynch will effectively reimburse Temasek for its paper losses so far. Good for them!
Still, it’s pretty obvious that the big Singapore-side investors have massively underestimated the magnitude of the current US slump. One can only hope that they’re really in it for the long run.
The Singapore investor had negotiated a reset clause, which meant that if Merrill were to issue new stock at less than $48 a share within 12 months, the bank would compensate Temasek for the difference for each share held. The result was that Merrill had to hand back $2.5bn, which Temasek plans to re-invest immediately along with a fresh capital injection of $900m.
[...]
Temasek’s proposed $3.4bn holding in Merrill Lynch is subject to regulatory approval. Depending on the take-up of Merrill’s $8.5bn share offering, Temasek’s stake could rise from 9 per cent to closer to 15 per cent. Any holding above 10 per cent would require formal approval from US regulators.
This apparently means that Merrill Lynch will effectively reimburse Temasek for its paper losses so far. Good for them!
Still, it’s pretty obvious that the big Singapore-side investors have massively underestimated the magnitude of the current US slump. One can only hope that they’re really in it for the long run.
