Merrill talking to BofA

The NYT reports that the talks are advanced. The price being mentioned by the Times is $38.25 billion in stock. But more than price, the move is seen as an effort to shore up what many consider the next likely investment bank victim if Lehman were to go under (which is looking more and more likely). A deal could be announced within hours.

Bank of America, the nation’s second largest bank by asset size, had been mulling buying Lehman, perhaps in a consortium with other financial players. But with financial aid from the government looking unlikely, Bank of America has moved on to Merrill, these people said. As Lehman began to totter in recent weeks, investors feared that Merrill would be the next victim of the credit squeeze. Shares in Merrill, which has already reported tens of billions of dollars in losses, have plunged more than 68 percent over the past year.