BlackRock Poised To Buy Barclays Unit For $12 Billion-$14 Billion -Source
10 June 2009 - 9:59AM
Dow Jones News
BlackRock Inc. (BLK) is poised to buy Barclays PLC's (BCS)
asset-management unit for between $12 billion and $14 billion in a
deal expected to be announced Wednesday morning, according to a
person briefed on the situation.
The purchase will transform New York-based BlackRock into the
world's largest asset-management company, overseeing nearly $3
trillion. U.K.-based Barclays, which has been struggling to raise
capital amid the credit crisis, will retain a 20% stake in the
business, which is known as Barclays Global Investors. San
Francisco-based BGI includes the fast-growing iShares ETF unit and
a larger but less-prominent institutional money management
operation.
BlackRock will use a combination of cash and stock to pay for
Barclays Global Investors. The proposed deal trumps an earlier $4.4
billion agreement for Barclays to sell just the iShares business to
private equity firm CVC Capital Partners. CVC will have five days
to come up with another, higher bid. If it doesn't, Barclays will
owe it a roughly $180 million breakup fee.
On Tuesday, shares of BlackRock rose $12.78, or 7.5%, to $182.14
as rumors of the deal circulated.
-Ian Salisbury; Dow Jones Newswires; 201-938-5219;
ian.salisbury@dowjones.com