Bank of America Corp.'s deal for Merrill Lynch & Co. Inc. would not seem to impose severe penalties on the seller if its shareholders fail to give the green light.

There has not been a shareholder revolt at Merrill, but there has been some chatter on trading desks, especially in light of the government's proposed bailout.

"We think Merrill holders may be less interested in seeing this deal happen," Glenn Schorr, a UBS AG analyst, wrote in a research note issued this week.

Marc Pado, U.S. market strategist for Cantor Fitzgerald LP, asked: "What if the package offered by the government is such that … [Merrill] looks at it and decides they never needed to be bailed and should remain stand-alone?"

B of A agreed last week to purchase Merrill for $50 billion of stock. The Charlotte company would pay the equivalent of $29 a share, or a 70% premiums over Merrill's closing price Sept. 12.

The financial landscape has changed drastically since the deal was signed. Lehman Brothers filed for bankruptcy protection and sold its broker-dealer unit to Barclays PLC. Also, Goldman Sachs Group Inc. and Morgan Stanley have become banking companies and are regulated by the government, and both companies have secured large capital infusions.

If the Merrill deal failed, the agreement states, Merrill would grant B of A a binding option to purchase, "under certain circumstances, up to 19.9% of its outstanding common shares at a price, subject to certain adjustments, of $17.05 per share."

Still, Mr. Pado said canceling the deal would be more difficult than traders may think. For one thing, if Merrill backed out, it would come under much of the same trading pressure on Wall Street as before, and it still could not survive in the same structure as it was a week ago, he said.

The deal is expected to close in the first quarter.

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