Barclays in talks with BlackRock over asset sale

By AFP

July 15, 2010 Updated Jun 8, 2009 at 7:01 AM CDT

Barclays on Monday said it had held talks with US money manager BlackRock on the possible sale of the British bank's asset management arm.

The Sunday Telegraph reported over the weekend that a sale of Barclays Global Investors (BGI) to BlackRock for 13 billion dollars (9.3 billion euros) could be announced this week.

"Barclays has had discussions with a number of parties, including with BlackRock" regarding the sale of BGI, the bank said on Monday.

"The discussions are not yet concluded and there are a number of significant open issues which could affect the nature and terms of any transaction," it added in a brief statement.

Barclays on Monday added that its talks with BGI and the other parties had centred also on the possible purchase of iShares, a division of BGI.

Barclays in April agreed to sell iShares to private equity group CVC Capital Partners for 4.4 billion dollars to help the bank avoid having to join a government insurance scheme for risky assets.

However Barclays has the right to break the deal and sell to a third party up until late June.

The Financial Times meanwhile on Monday reported that Bank of New York Mellon had launched its own bid to buy BGI. It added that should BlackRock succeed in the battle for BGI, Barclays would take a 20-percent stake in the US money manager.

In early London stock market trading on Monday, Barclays' share price was down 2.01 percent at 279.25 pence on the FTSE 100 index, which was falling 1.30 percent.

Shares in Barclays had tumbled a week ago after Abu Dhabi's state-owned International Petroleum Investment Company sold a chunk of its holding in the bank for a sizeable profit.

The shares were sold at 265 pence each for a total of 3.5 billion pounds (5.8 billion dollars, 4.1 billion euros), handing IPIC a gain of 1.5 billion pounds in just seven months.

Last year, Barclays secured a seven-billion-pound capital injection that was largely backed by oil-rich investors from Abu Dhabi and Qatar, as it sought to avoid taking British government funds in a bid to survive the credit crunch.

Abu Dhabi's shock move to sell came after Barclays shares had surged by about 50 percent in value since last October.

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