Merrill rises on Chase bid rumours

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The Independent Online
SHARES IN Merrill Lynch, the Wall Street investment bank, jumped 7 per cent in New York last night on reports that it and Chase Manhattan are sounding each other out about a resumption of merger talks. Wall Street insiders say a deal may have been made more likely by last month's departure from Merrill Lynch of president Herb Allison, believed to have been a strong opponent of a Chase merger. The talks are believed to have foundered last year over lack of agreement on who would run the combined organisation.

Sources say that with David Komansky, Merrill's chief executive, now 60, that is less of an issue. Chase does not hide its wish to move into investment banking in a serious way, while Merrill could benefit from Chase's large network of commercial lending relationships. There have also been rumours that Merrill is talking to AIG, the insurance giant.