LONDON: Barclays Plc, the U.K.’s second- largest bank by assets, will sell its entire US$6.1 billion stake in BlackRock Inc. before the latest round of Basel rules stops it from counting the holding as capital.
BlackRock, the fund manager started by former mortgage-bond trader Laurence Fink, in a statement said it will buy back as much as US$1 billion of shares from Barclays as part of the transaction. The British bank took the 19.6% ownership when it sold Barclays Global Investors to BlackRock in December 2009 for about US$15.2 billion.
The latest rules from the Basel Committee on Banking Supervision will force the lender to set aside capital against the stake to cushion itself against any decline in the value of the holding. BlackRock has slipped 24% since the purchase was completed, prompting Barclays to write down the value of its stake in 2011 to about 3.4 billion pounds (US$5.3 billion).
Barclays, Morgan Stanley and Bank of America Corp. are selling about 29 million shares to money managers, including the over-allotment option. They expect to set a price for the stock on May 23, according to a term-sheet for the offering.
BlackRock fell 3.1% to US$166.57 at 9:34 a.m. in New York. The stock was at $227.08 the day before the purchase was completed. Barclays rose 1.5% to 178.7 pence as of 2:40 p.m. in London trading today. (Bloomberg/T05/aph)
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