Barclays prices Blackrock offering

published 23 May 2012

UK banking titan Barclays has announced the pricing details of the open offer part of its recently announced sale of its stake in US wealth management giant Blackrock.

Barclays has agreed to sell 26.2m shares of Blackrock in an underwritten public offering at a price of $160 a share. In addition, as previously announced, Blackrock will repurchase 6.4m Blackrock shares from Barclays at $156.80 per share, for an aggregate purchase amount of $1.0bn.

The underwriters of the share offering have been granted an option, exercisable within the next 30 days, to purchase up to 2.6m additional Blackrock shares at the price payable by the underwriters in the offering. If the underwriters fully exercise their option to purchase additional shares, the offering and repurchase will together result in the disposal of Barclays entire 19.6% stake in Blackrock shares.

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Barclays received shares in Blackrock in December 2009 as part of the consideration for the disposal of Barclays Global Investors to Blackrock. Excluding the gain on sale, the impact of the disposal on Barclays earnings per share is not expected to be material. The sale is expected to cause an uplift to Barclays core tier 1 ratio - a measurement of balance sheet strength - of one-twentieth of a percentage point.