Barclays gets 1bn BGI boost
BARCLAYS last night cheered a £1.3bn boost from the expected sale of its asset management arm to US fund manager BlackRock, due to a 62 per cent hike in the fund manager’s shares since the deal was struck in June.
The bank said it had completed the $15.2bn (£9.1bn) sale of Barclays Global Investors (BGI) to BlackRock, creating the world’s largest asset manager with more than $3,000bn in assets. The sale price is £6.2bn higher than the value of BGI in Barclays’ accounts.
Barclays received $6.6bn in cash and 37.567m new shares, giving it a 19.9 per cent stake in the enlarged money manager.
Barclays’ chief executive John Varley and Barclays Capital chief executive Bob Diamond will take seats on BlackRock’s board.
The sale will also result in a $1bn pay-out to BGI’s 3,500 staff, including Diamond, as part of an equity ownership plan.
Barclays’ core tier-one ration, the key measure of capital strength, will be lifted by 0.6 percentage points to 9.2 per cent on a pro forma basis, better than the 8.8 per cent it had expected when the bank’s third quarter results were published last month.