BlackRock Inc, the world’s biggest publicly traded asset manager, is the leading contender to buy the asset management unit of Barclays Plc in a deal worth more than $10 billion, three people familiar with the matter said.
The talks are still at an early stage and aren’t exclusive, according to the people, who declined to be identified because the discussions are private. The bank has also held talks about selling the Barclays Global Investors unit to Bank of New York Mellon Corp, people familiar with the talks said last month.
A purchase of San Francisco-based BGI would give BlackRock a total of $2.81 trillion in assets and more customers outside the US Barclays agreed in April to sell BGI’s iShares unit to CVC Capital Partners Ltd for $4.4 billion. The bank has until June 18 to look for better alternatives to that deal.
Barclays, which shunned government funds, is seeking to raise cash after $18.6 billion of credit losses and writedowns. The London-based bank’s capital adequacy ratios still lag behind those of Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, which accepted state control in return for taxpayer funds.
The Financial Times earlier reported that Barclays was nearing a sale of BGI to BlackRock for more than $10 billion. Alistair Smith, a spokesman for Barclays in London, and Bobbie Collins, a spokeswoman for BlackRock both declined to comment.
Barclays is seeking more than $12 billion for the unit, and may keep a 20 per cent stake in BGI, one of the people said. The bank is still in talks with other bidders, including Bank of New York Mellon, the person added.
A takeover of BGI would also be the biggest ever in the fund-management industry, according to data compiled by Bloomberg.
It would exceed BlackRock’s $8.5 billion takeover of Merrill Lynch & Co’s investment management business in 2006.
Barclays shares gained 19 pence, or 7 per cent, to 285 pence in London trading on June 5. BlackRock fell $1.41, or 0.85 per cent, to $163.74 in New York Stock Exchange composite trading.
