British bank Barclays said it is to sell its 19.6 per cent holding in US asset manager BlackRock, worth US$6.1 billion and which it has held for almost three years.
Tougher global regulations mean banks have to hold more capital against their stakes in asset managers and other firms, making it less profitable.
Barclays Chief Executive Bob Diamond is attempting to get the bank’s return on equity back above 13 per cent, by selling or shutting businesses or investments that do not stack up.
Barclays said the shares would be sold by way of an offering and a related buyback by BlackRock of up to US$1 billion of the stock. Bookbuilding was expected to take a couple of days before the price of the share sale is finalised.
Barclays holds BlackRock common stock and convertible stock that represent 19.6 per cent economic interest in the firm.
The holding dates from BlackRock’s US$13.5 billion purchase of Barclays Global Investors in June 2009. That made BlackRock the world’s largest money manager, almost doubling its size to give it roughly US$2.8 trillion of assets under management, and gave the Barclays a much-needed capital boost.
The cash-and-stock deal also left BlackRock as one of the biggest shareholders in Barclays, with a 7.1 per cent stake. The statement by Barclays made no mention of that stake.
Barclays Capital, Morgan Stanley and Bank of America Merrill Lynch are joint bookrunners for the offer. A prospectus was filed by BlackRock on Monday.
BlackRock shares closed last Friday at US$171.91.