Let the speculation about Bloomberg begin.

Merrill Lynch will raise $4.5 billion to $5 billion by selling its 20 percent stake in Bloomberg L.P. back to the New York City mayor who founded it, according to several reports. The bank also held talks about selling all or part of its 49 percent stake in the money manager BlackRock, but those talks have now been shelved.

Merrill is expected to announce the sale when it reports earnings on Thursday afternoon.

As Merrill Lynch's balance sheet has further deteriorated in recent months, it became clear to its chief executive John Thain that the firm would need to sell one of its prized assets in order to improve its liquidity position. The circumstances Thain agreed to in its earlier capital raises from outside investors prevent it from issuing more common stock to raise cash.

This sale may not mean that Thain is out of the woods yet. The company is expected to report its fourth consecutive quarterly loss on Thursday. Analysts expect it to record as much as $6 billion dollars in write-downs of its most toxic assets, on top of the $30 billion it has already marked down.

And the sale price is slightly less than the $5 billion to $6 billion that Thain estimated it was worth during a conference call last month. Because Michael Bloomberg had veto rights over who would buy the stake, the sale was likely without any competitive bids.

With this deal, the chatter around the media company's fate will undoubtedly reach new peaks. It will also raise speculation about Mayor Bloomberg's next move.

The deal values Bloomberg at as much as $25 billion, a figure that puts to rest a longstanding mystery over the financial media firm's valuation. The company's success was on selling subscriptions to its data services over proprietary terminals, which are fixtures on most Wall Street trading desks. It also has a global wire service as well as television and other media properties.

Just last week, Bloomberg announced a number of changes to its structure, including the separation of its television and radio businesses from its print news business. It also formed a new unit, Bloomberg Ventures.

These are changes that were ushered in since the company hired Norman Pearlstine from Carlyle Group in May.

As the firm regroups and brings its ownership under one roof, plenty of media watchers wonder what the future holds for Bloomberg.

Will Mayor Mike return to his roots after his term ends and expand the media giant that made him a billionaire?

No doubt he's noticed how cheap the New York Times Company looks these days.