Barclays PLC (BCS) said Friday that it expects to book a GBP5.3 billion gain from the sale of Barclays Global Investors to BlackRock Inc. (BLK), substantially improving its capital position and allaying previous concerns about the U.K. bank's solvency.

The bank said it has agreed to sell BGI to BlackRock for $13.5 billion, or GBP8.2 billion. Under the terms of the deal it will get a 19.9% interest in BlackRock and GBP4 billion in cash.

It said the offer from BlackRock is superior to Barclays' previously-agreed deal to sell BGI's iShares division to private equity firm CVC Capital Partners for GBP3 billion. Barclays said CVC has until next Thursday to match or better the BlackRock offer. Nobody was immediately available to comment at CVC.

The BlackRock agreement follows almost a week of speculation that various interests were vying for BGI and iShares, driving Barclays shares up more than 7% by midweek.

Selling BGI is part of Barclays' ongoing strategy to repair its balance sheet in the wake of the financial crisis and avoid turning to the U.K. government for support.

Its local rivals Royal Bank of Scotland Group PLC (RBS) and Lloyds Banking Group (LYG) were both forced to seek government help and are now partly state-owned.

At 0734 GMT, Barclays shares were down 5 pence or 1.8% at 299 pence. They have almost doubled since the start of the year, sharply outperforming the Stoxx Europe 600 bank index, which is up by around 24%. The shares are down 6.3% over the last 12 months compared with the Stoxx index's 40% decline.

A London trader said confirmation that BlackRock is offering $13.5 billion for BGI was ahead of estimates and press speculation, but that Barclays is "selling off the silverware," by ridding itself of a key part of the business. On the positive side, the trader said the deal puts the bank's solvency beyond any doubt.

If the BlackRock deal goes ahead, Barclays said it will add 150 basis points to its core Tier 1 ratio, lifting it to a pro forma 8% at the end of 2008. Its equity Tier 1 ratio would increase by 163 basis points to 8.3%.

The move makes BlackRock one of the leading global providers of investment management services with pro forma assets under management of approximately $2.8 trillion at the end of 2008. The expanded business will be renamed BlackRock Global Investors.

"Barclays would extend its ability to meet the sophisticated investment needs of its existing and future clients and customers by accessing the enhanced investment platform and capabilities of BlackRock Global Investors," Barclays said, adding that it would also gain access through BlackRock to new channels and customers for Barclays products and advisory services, offering new revenue opportunities.

Barclays said its trading performance through to the end of May has been generally consistent with the overall trends it reported on May 7, when it said first-quarter net profit was up 12% from the year before. It said the increased earnings were due to a surge in investment banking profits, and that April trading had been in line with the trend seen in February and March.

Commenting on the BlackRock deal, Barclays Chief Executive John Varley said: "The asset management industry is fragmented. In such circumstances the economies of scale created by a combination with this breadth of business offer considerable growth to shareholders over time."

Company Web site: www.group.barclays.com

-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@dowjones.com

(Andrea Tryphonides contributed to this item.)