Barclays to profit from sale of Blackrock stake
Barclays is to sell its near one-fifth stake in the world's biggest asset manager, US firm Blackrock.
Barclays is to sell its near one-fifth stake in the world's biggest asset manager, US firm Blackrock.
Barclays currently holds BlackRock common stock and Series B convertible participating preferred stock which together represent a 19.6% economic ownership interest in BlackRock. The Series B stock automatically converts into common stock upon a sale.
The transaction will be by way of an offering and related buyback by Blackrock itself, and is likely to raise around £3.8bn based on the valuation at the close of trading last Friday. In September 2011 Barclays' investment in BlackRock was written down to a fair value of £3.4bn. The subsequent increase in value of the stake has been taken to equity, the bank said, adding that for regulatory capital purposes, the increase is not recognised in Barclays core tier 1 capital.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Neverthless, the funds will be welcome as Barclays, like all UK banks, is under pressure to bolster its balance sheet as the Eurozone flirts with disaster.
Shortly after the announcement, at 11:00 London time, Barclays' stock had risen 2.1%. In the last 12 months Barclays shares have declined 34%.
BS
-
FTSE 100 hits record highs – why is it rising and will we see more gains?
Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
By Marc Shoffman Published
-
How to invest in copper
It may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
By Dominic Frisby Published