UPDATE: Barclays Gets Other Offers For Its iShares, BGI Operations
08 Juin 2009 - 10:29AM
Dow Jones News
U.K. bank Barclays PLC (BCS) said Monday it has received
additional proposals for its iShares business and the broader
Barclays Global Investors unit that owns it, including from
BlackRock Inc. (BLK).
The announcement is potentially a further challenge to CVC
Capital Partners' deal agreed in April to buy iShares for $4.4
billion. The agreement allowed Barclays to shop around for better
offers till the middle of June.
Barclays has said since that it has received other proposals for
iShares and for BGI.
The announcement Monday comes after recent media reports said
BlackRock and Bank of New York Mellon Corp (BK) are racing to buy
BGI. The Financial Times said on Monday that BNY Mellon could
challenge BlackRock's bid for BGI.
Pensions & Investments on Friday cited a person not directly
involved in the deal as saying that the announcement was likely
"within the next few days."
Another person said that, although CVC would have the option to
counteroffer, its chances of topping the BlackRock offer, said to
be in excess of $10 billion, would be slim.
"In assessing such proposals, Barclays has had discussions with
a number of parties, including with BlackRock, about both iShares
and BGI," it said Monday.
Barclays said "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."
"There is no certainty that these discussions will result in
Barclays concluding a different transaction than that announced on
April 9 with CVC regarding iShares," it said.
At 0742 GMT, Barclays shares were down 2.4% at 278 pence, while
the FTSE100 index was down 1.1%.
Oriel Securities analyst Mike Trippitt said a bidding war for
BGI is now possible as there are other parties interested in the
asset.
He said that based on media reports, "it reads like BlackRock is
more advanced in organizing its finance, and that's something that
Barclays might want to think about."
Shore Capital analyst Danny Clarke said that multiple proposals
to buy BGI "suggest a competitive process which is encouraging for
Barclays."
Clarke said that expectations of any deal being imminent could
be dampened as Barclays said "significant open issues" could affect
any transaction. "We still expect the sale of BGI to proceed,
providing a further welcome boost to capital," Clarke said, while
keeping his hold rating.
A Barclays spokesman said the company wouldn't comment beyond
Monday's statement. A BNY Mellon spokesman couldn't be immediately
contacted.
Company Web site: www.barclays.com
-By Vladimir Guevarra, Dow Jones Newswires. +44 (0) 20 7842
9486, vladimir.guevarra@dowjones.com