There was a lot of talk yesterday at Merrill Lynch’s annual meeting. CEO John Thain talked about how the bank’s shareholders were using the benefit of "20/20 hindsight" to bash its directors over the credit cataclysm. He also talked about how difficult it was to measure what risks the bank was/is/will be exposed to. But he didn’t breathe a word of the really big news out today: a bit of under-the-radar chit-chat, apparently, between Merrill and a certain gigunda private-equity firm. But other people in the know were talking about it plenty. Here’s what they’re saying.

Merrill Lynch is holding talks with TPG to discuss closer ties – including the possibility of the private equity firm investing in Merrill if the investment bank needs more capital, according to people familiar with the talks.

The two sides met most recently in New York on Monday. The participants included John Thain, Merrill’s chief executive; Greg Fleming, its president; David Bonderman, TPG co-founder; and other key TPG executives.

The discussions date from last autumn, when Mr Bonderman contacted Mr Thain during the investment bank’s search for rescue finance. TPG and its hedge fund affiliate, TPG-Axon, offered to put as much as $3bn (£1.5bn) into Merrill, but made demands including the right to nominate a board member and meet management frequently.

Merrill eventually raised capital from a group led by Temasek of Singapore and the Kuwait Investment Authority, but it continued talking to TPG about becoming a co-investor in the private equity firm’s deals and helping TPG find opportunities and structure transactions, particularly in places such as Russia and India.

TPG is also hoping to get the first call if Merrill requires more capital, say people familiar with its thinking.

The talks are tricky, if only because TPG cannot risk seeming too close to Merrill without endangering its relations with other banks, upon which it relies to source deals. However, the two sides agreed to continue discussions after Monday, according to people familiar with the talks.

Merrill declined to comment.

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