Barclays staff to share pounds 380m.MORE than 400 Barclays staff are to share pounds 380m after the bank agreed to sell its fund management arm to US suitor BlackRock. BlackRock will pay pounds 8.2bn for Barclays Global Investors Barclays Global Investors is a subsidiary of British-based Barclays Bank which is in the investment management industry. It is the largest corporate money manager in the world, with over £936 billion (US$1.77 trillion) under management as of March 2006[1]. (BGI BGI Barclays Global Investors BGI Bainbridge Graduate Institute BGI Bureau Gravimétrique International BGI Borland Graphic Interface (File Name Extension) BGI Bridgetown, Barbados - Grantley Adams International ), netting 410 employees hefty profits on shares bought in the division. Bob Diamond, Barclays president and investment banking boss, will pick up a pounds 22m profit before tax on his stake, having forked out pounds 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 pounds 4bn in cash and shares worth about pounds 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 CVC Capital Partners is a European private equity firm. CVC was founded in 1981 as the European private equity arm of Citigroup, but after a buyout in 1993 it is owned by its management. In 1999, CVC established CVC Asia Pacific, which is a joint venture with Citigroup. for pounds 2.7bn. Private equity house CVC See CSC. 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 pounds 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 pounds 1.64trillion - making it the world's largest asset manager. Barclays expects to make net proceeds of pounds 5.3bn from the sale.. |
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