Barclays staff to share £380m
Jun 13 2009 by Iain Laing, The Journal
MORE than 400 Barclays staff are to share £380m after the bank agreed to sell its fund management arm to US suitor BlackRock.
BlackRock will pay £8.2bn for Barclays Global Investors (BGI), netting 410 employees hefty profits on shares bought in the division.
Bob Diamond, Barclays president and investment banking boss, will pick up a £22m profit before tax on his stake, having forked out £6m on shares over the past six years.
The deal will also significantly bolster Barclays’ financial strength, making it one of the most capitalised banks in the world, according to the group’s chief executive John Varley.
New York-based BlackRock is paying £4bn in cash and shares worth about £4.2bn for BGI, which is headquartered in San Francisco. Under the deal Barclays will end up with a near-20% stake in New York-based BlackRock.
The firm’s purchase includes BGI’s iShares division, which Barclays had previously agreed to sell to CVC Capital Partners for £2.7bn.
Private equity house CVC now has five business days to match BlackRock’s terms or walk away from the deal, but if it decides not to bid it is in line to receive a “break fee” of £106m.
Talks over the takeover of BGI came after Barclays put iShares up for sale three months ago. iShares specialises in exchange-traded funds – a type of investment vehicle which can be traded on exchanges in the same way as shares, and gives inexpensive and broad access to other kinds of investments.
In agreeing a deal with CVC, Barclays retained the right to sell the firm or related businesses to other would-be buyers under a “go-shop” clause expiring on June 18.
BlackRock said its takeover of BGI would create a firm with combined assets under management of more than £1.64trillion – making it the world’s largest asset manager. Barclays expects to make net proceeds of £5.3bn from the sale.
