British bank Barclays to exit US asset management firm BlackRock
BlackRock, a major US asset management company, has agreed to repurchase the entire $6.1 billion worth of its stock held by British bank Barclays on completion of a secondary offering of its common stock which commenced Monday.
Barclays Bank PLC intends to use the opportunity to fully exit its investment in the Company.
The British bank took the stake in the fund management company when it sold Barclays Global Investors to BlackRock in December 2009 for about $15.2 billion. BlackRock shares have since slipped 24 per cent, prompting Barclays to write down the value of the holding in September 2011 to about $5.3 billion.
Barclays currently holds around 19.6% (approximately 35.2 million shares) economic ownership interest in the Company.
The market value of Barclays investment in BlackRock, based on the closing price of BlackRock common stock on 18 May of $171.91 and assuming conversion of preferred stock, was $6.1 billion.
BlackRock also announced Monday that immediately following the close of the secondary offering and subject to Barclays exiting its full ownership position (excluding the exercise of the option), the company intends to repurchase $1 billion of common stock directly from Barclays.
The purchase price to be paid by BlackRock would be equal to the net price per share that Barclays receives in the secondary offering.
BlackRock will purchase a proportionally smaller amount in the event of a sale of fewer shares by Barclays.
Barclays intends, subject to exercise in full of the option, to sell its entire holding via the offering and repurchase.
BlackRock will not receive any of the proceeds from the sale of shares of its common stock.
The secondary offering will occur simultaneously in the United States and internationally through underwriters led by joint book-running managers Barclays Capital Inc., Morgan Stanley and BofA Merrill Lynch.
Source: United States News.Net
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