The New York Post is reporting that Mayor Mike is willing to fork over between $4.5 and $5 billion for the 20% stake in his company currently held by Merrill Lynch (NYSE:MER). The privately held Bloomberg has always kept its financials close to the vest.
Merrill initially held a 30% stake in the company but sold 10% back to Mike Bloomberg for a mere $200 million in 1996, then valuing the company at $2 billion. Of course, Bloomberg, which is 70% owned by Mike, has grown tremendously since then. While estimates are at best guesses, others have projected that Bloomberg has 250,000 terminals in use today, generating upwards of $4.5 billion in revenue. In the spring of 2007, Fortune floated a value of roughly $20 billion for the company.
Of course, Mike Bloomberg may be willing to pay a premium to keep from having to open his books to the public. It's in both his and Merrill's interest to get a deal done quickly, in advance of their July 17 earnings report.
Update: Bloomberg has announced a restructuring where they will carve out a multimedia operation (Internet, TV and radio) under new leadership. Paid Content has the details.
The changes seem to have the imprint of new Bloomberg president Dan Doctoroff. Most surprising was the announcement of a new bonus plan where employees would be eligible for a bonus equal to 70% of their salary if the company grows revenue to $10 billion (from the current $6.5 billion) by 2013. This is a huge change from the unusual "cert" system that's been in place since the early days of the company. Under that system, each employee is awarded certs (certificates) annually, based upon the performance of the company. The certs are then paid off in the following two years, in an effort to improve retention. Even sales execs were paid under the cert system, helping drive a unique corporate culture where all employees were focused on maximizing terminal installs.
While Mike gave up management responsibility when he became NYC mayor, it seems that now, he's truly loosening his grip on the corporate culture.