Once again, John Thain is in the midst of a financial firestorm.
His company, Merrill Lynch, agreed yesterday to be acquired by Bank of America Corp. for $50 billion.
The Wall Street Journal reports that on Saturday, Thain called Bank of America chief Kenneth Lewis and suggested a deal. An agreement followed 48 hours of intense negotiations.
Federal Reserve Bank of New York head Timothy Geithner, who has in the past acted as an adviser to Thain, urged the deal, according to the Journal.
The Merrill deal is the latest in an aggressive buying spree by the Charlotte, N.C.-based Bank of America. Acquisitions in recent years include FleetBoston Financial, LaSalle Bank and the troubled Countrywide Financial.
Thain, former president of Goldman Sachs, assumed leadership at Merrill after the departure of Stanley O’Neal last October. O’Neal was ousted after announcing a $2.24 billion quarterly loss.
Known as “Mr. Fixit” for his four-year leadership of the New York Stock Exchange, Thain tried to repair Merrill’s balance sheet by seeking investors and selling off troubled debt. But crippling losses continued.
Today, analysts are calling Thain a realist who sought the best arrangement for Merrill as its stock plummeted. The purchase been approved by directors of both companies, subject to shareholder votes and approval by regulators.
Once the sale is completed, Thain’s exit package will total about $9.7 million.
Thain is a top bundler for GOP presidential nominee John McCain, having helped raise more than $500,000 for the campaign.
Speaking at a rally in Florida today, McCain pledged to “clean up Wall Street” with clearer, more effective regulation. “The cronyism and the old boy network is going to come to a halt,” he said.
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