Bloomberg, the eponymous financial information and media group set up by the Mayor of New York, is close to buying a 20 per cent stake of its own shares from Merrill Lynch for about $5 billion (£2.52 billion).

Although a deal could fall apart, Mr Bloomberg, who already owns 72 per cent of the group that he founded, is understood to be keen to buy Merrill Lynch's stake.

Merrill Lynch is keen to sell assets to plug the gaps in its balance sheet after suffering more than $30 billion of losses on investments in sub-prime mortgages. The brokerage is also thought to be considering selling part of its 49.8 per cent stake in BlackRock, America's largest public asset management group. That holding is worth roughly $10 billion. Merrill Lynch is understood to be keen to secure an asset sale before it releases its second-quarter profits on July 17.

Analysts expect Merrill to announce a further $6 billion of investment writedowns for the quarter, and the broker is keen to appease investors by having a similar-sized amount of cash ready to plug the gap. However, analysts said that Merrill may look to raise substantially more than $6 billion to provide a cushion against further losses in the third and fourth quarters.

The company has held the stake in Bloomberg for two decades. Bloomberg has the right of first refusal in the event of any disposal.

John Thain, who replaced Stan O'Neal as Merrill's chief executive towards the end of last year, hinted in June that he would rather sell the Bloomberg stake than the BlackRock holding, which he referred to as a strategically important asset. “Bloomberg is just a very good investment,” Mr Thain said.

Merrill Lynch sold its investment management business to BlackRock in 2006 in exchange for a near-50 per cent stake in the asset manager. The broker distributes BlackRock's funds and is thought to be planning to keep its strategic relationship with BlackRock even if it sells part of its stake.

Bloomberg and Merrill Lynch declined to comment.

Merrill Lynch is one of many Wall Street companies looking to raise extra cash through asset sales after suffering billions of dollars of sub-prime- related losses. Citigroup, for example, is in the process of selling more than $400billion of assets over the next two to three years.

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