Merrill Lynch could be looking to sell its 20% stake in US financial information business Bloomberg to raise capital after writing down $8.4 billion of assets in its third quarter.
Rumours that the brokerage may look to dispose of the shareholding follow comments made by Merrill chief executive Stan O'Neal that the company is looking to sells off "certain non-core assets".
Market analysts have cited the Bloomberg stake as an example of such an asset and selling it could be a cheaper way of raising capital than selling securities.
According to press reports, some analysts and fund managers have indicated that there would be strong interest in the Bloomberg stake if Merrill did decide to sell.
Merrill originally invested in Bloomberg in 1985 and had increased its stake to 30% by 1990. Merrill sold 10% of its stake in the business in 1996.
Merrill's 20% stake cannot be sold to a direct competitor and Bloomberg has the right of first refusal to buy the stake, says a Reuters report, which cites a source familiar with the situation.
The 20% stake is estimated to be worth between $5 billion and $10 billion, which would value Bloomberg at up to $50 billion.
In October 2006 Mayor of New York Michael Bloomberg, who holds a 68% stake in the financial information business, ruled out a sale despite receiving several bid approaches.
However Bloomberg has said in the past that he will eventually sell his stake and the proceeds - which are thought to amount to billions of dollars - will be used to form a charitable trust.