Barclays considers selling its asset unit to BlackRock
Jun 08 2009 2110 hrs IST , NEW YORK By LANDON THOMAS JR. AND MICHAEL J. de la MERCED Barclays of Britain is in advanced talks to sell its asset-management arm to BlackRock, the giant money manager, for more than $10 billion, people briefed on the matter said. Asale of Barclays Global Investors, or B.G.I., could lead to major changes for both firms. B.G.I. is considered a trophy in the asset management business, operating in 15 countries and managing more than $1 trillion in assets. A deal could be reached sometime this week, although those briefed on the talks cautioned Sunday that negotiations were continuing and could still fall apart. One of the biggest unresolved matters is price, with Barclays seeking more than $12 billion for B.G.I. Other firms may also bid. Should a deal be reached, Barclays would probably retain a stake in B.G.I., and Robert Diamond, president of Barclays, would take a seat on Black- Rock’s board, these people said. In a statement Monday, Barclays said it had had discussions with ‘‘a number of parties, including with BlackRock,’’ about both B.G.I. and iShares, the exchange- traded funds unit of B.G.I. ‘‘The discussions are not yet concluded, and there are a number of significant open issues which could affect the nature and terms of any transaction,’’ the bank said. ‘‘There is no certainty that these discussions will result in Barclays concluding a different transaction’’ than the one it announced in April to sell iShares to the private equity firm CVC Capital Partners. In a statement, BlackRock also confirmed the talks. Barclays has been seeking to improve upon the $4.2 billion deal that it reached with CVC. Under the terms of the deal, Barclays has until June 18 to seek a better offer, though it must pay CVC a $175 million breakup fee if it walks away. Barclays, which is seeking to raise capital to bolster its balance sheet, has been criticized for selling the iShares unit for too little. Selling B.G.I. may also allay concerns over the financial health of Barclays, especially after an investment vehicle of the Abu Dhabi government said last week that it would sell its $6.8 billion stake in the British bank. Barclays was one of the few British banks to refuse government bailout money, instead seeking private investors to strengthen its financial health. It has embarked on a major expansion effort, beginning with the purchase of most of the North American business of Lehman Brothers last autumn, after Lehmanfiled for bankruptcy protection. Barclays had long said that B.G.I. was a crucial part of its global empire, but selling the unit could give the firm the money it needs to grow. Adeal to acquire B.G.I.would be Black- Rock’s largest deal. The firm, headed by Laurence D. Fink, has grown, in part, through a series of major acquisitions. BlackRock, which began as a bond investment firm, is now widely regarded as one of the best-run money managers, having emerged from the financial crisis largely unscathed. The firm now manages about $1.3 trillion, and it has been given the task of managing the toxic assets of Bear Stearns and American International Group for the U.S. government. Acquiring B.G.I. would significantly bolster BlackRock’s assets under management and give it a bigger presence outside the United States. B.G.I., based in San Francisco, has long prided itself for its stable of institutional accounts and its investment research teams. _________________________________________________________________ More than messages–check out the rest of the Windows Live™. http://www.microsoft.com/india/windows/windowslive/ --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
