Monday, 21 May 2012 11:06
Barclays Capital Inc., Morgan Stanley & Co. LLC and Bank of America Merrill Lynch are acting as joint bookrunners in the offering.
Barclays plc (LON:BARC) has today announced that it intends to undertake a disposal of its entire holding in BlackRock, Inc. (NYSE:BLK) by way of a registered offering and a related buyback by BlackRock.
A preliminary prospectus supplement relating to the offering was filed today by BlackRock with the U.S. Securities and Exchange Commission. Barclays Capital Inc., Morgan Stanley & Co. LLC (NYSE:MS) and Bank of America Merrill Lynch (NYSE:BAC) are acting as joint bookrunners in the offering. In connection with the offering, BlackRock has agreed to repurchase up to $1.0 billion of its stock from Barclays conditional on completion of the offering.
Barclays currently holds BlackRock common stock and Series B convertible participating preferred stock (which automatically convert into common stock upon a sale), together representing a 19.6% economic ownership interest in BlackRock. Barclays intends, subject to exercise in full of an option to be given to the underwriters of the offering, to sell its entire holding via the offering and buyback.
In September 2011 Barclays investment in BlackRock was written down to a fair value of £3.4 billion. The subsequent increase in value of the stake has been taken to equity. For regulatory capital purposes the increase is not recognised in Barclays core tier 1 capital. 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 (£3.8 billion).
A further statement will be issued following pricing of the offering.
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