diff --git a/pandas/io/excel.py b/pandas/io/excel.py
index 534a88e303dbf..031081f557794 100644
--- a/pandas/io/excel.py
+++ b/pandas/io/excel.py
@@ -78,10 +78,10 @@ def __init__(self, path_or_buf, kind=None, **kwds):
         self.tmpfile = None
 
         if isinstance(path_or_buf, compat.string_types):
-            self.book = xlrd.open_workbook(path_or_buf)
+            self.book = xlrd.open_workbook(path_or_buf, **kwds)
         else:
             data = path_or_buf.read()
-            self.book = xlrd.open_workbook(file_contents=data)
+            self.book = xlrd.open_workbook(file_contents=data, **kwds)
 
     def parse(self, sheetname, header=0, skiprows=None, skip_footer=0,
               index_col=None, parse_cols=None, parse_dates=False,
diff --git a/pandas/io/tests/data/merged.xls b/pandas/io/tests/data/merged.xls
new file mode 100755
index 0000000000000..14b20be0788b3
Binary files /dev/null and b/pandas/io/tests/data/merged.xls differ
diff --git a/pandas/io/tests/test_excel.py b/pandas/io/tests/test_excel.py
index 1ac4d4e31ed10..07ea633987210 100644
--- a/pandas/io/tests/test_excel.py
+++ b/pandas/io/tests/test_excel.py
@@ -260,6 +260,24 @@ def test_excel_table(self):
         tm.assert_frame_equal(df4, df.ix[:-1])
         tm.assert_frame_equal(df4, df5)
 
+    def test_excel_read_merged_cells(self):
+        _skip_if_no_xlrd()
+
+        pth = os.path.join(self.dirpath, 'merged.xls')
+        xls = ExcelFile(pth, formatting_info=True)        
+        book = xls.book
+        sheet = book.sheet_by_index(0)
+        merged_cells = sheet.merged_cells
+        
+        self.assertEquals(len(merged_cells), 1)
+        rlo, rhi, clo, chi = merged_cells[0]
+        
+        self.assertEquals(rlo, 1)
+        self.assertEquals(rhi, 1+1)
+        
+        self.assertEquals(clo, 0)
+        self.assertEquals(chi, 1+1)
+
     def test_excel_read_buffer(self):
         _skip_if_no_xlrd()
         _skip_if_no_openpyxl()