HSBC has stated that its request for an increase in share capital is routine prudent housekeeping. It added that it has not sought to increase its share capital for nine years. Merrills stated that it does not comment on speculation. Meanwhile, some analysts in London and the US are less certain that the market talk has got it right, at least for the time being. They cite a number of obstacles that may prevent immediate-term wedding bells.
Culture is one main difference.
Merrill Lynch has always prided itself as being a part of Americana. Chairman David Komansky has been quoted as saying that Merrill Lynch, whose corporate logo is a bull, is as American as apple pie. It was also the first stockbroker to offer personal services, and co-founder Charles Merrill is known as the man that brought Wall Street to Main Street. Meanwhile, some analysts in London and the US are less certain that the market talk has got it right, at least for the time being. From HSBC's point of view, current uncertainty in the financial markets would make it hard to justify to shareholders that the benefits of a bid for Merrills would outweigh the risks, particularly as any bid would entail a premium price to take into account the strong Merrill Lynch brand name.