Barclays could sell BGI as well as iShares

08 June 2009 / by Rachael Stiles
Barclays has today confirmed speculations that it is in talks over the sale of its entire Barclays Global Investors (BGI) business, not just the fund management arm, iShares.

In April, Barclays agreed a deal to sell iShares, part of its wider BGI business, for $4.4billion to CVC Capital Partners, but the deal included a 'go shop' clause, which entitles Barclays to accept a better offer until before June 19.

Following reports and rumours over the weekend, Barclays has announced that it could sell its entire BGI business, and is considering a number of offers, including one from American investment firm BlackRock, which will reportedly bring in $13billion for Barclays.

The deal could be a merger, according to the Telegraph, which would leave Barclays with a stake in BlackRock, and could result in a $585million windfall for employees.

"Barclays has received other proposals for iShares and the broader BGI business," the bank said in a statement.

But, it continued, "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 9 April with CVC regarding iShares."

If Barclays does accept another offer for the sale of iShares or BGI as a whole, which includes iShares, it will have to pay CVC £175million as part of the 'go shop' clause.

The banking giant will have to make a decision on the fate of iShares and BGI before this clause ends on June 19.

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