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Barclays in talks with Goldman Sachs over sale of iShares

24 March 2009 / by Rachel Mason
Goldman Sachs is said to be working on a bid for iShares, the fund management business being sold by Barclays.

The investment bank is one of a reported three firms in talks with Barclays about the iShares business – the others are believed to be private equity group Bain Capital and a consortium led by buy-out firm Hellman & Friedman.

Last week, Barclays confirmed that it was considering selling iShares in order to raise capital so that it could take part in the Government's Asset Protection Scheme.

The Asset Protection Scheme insures banks' toxic assets. RBS and Lloyds Banking Group have already taken part, and had to pay the premium for joining the scheme in shares, which gave the Government a stake in both banks.

Although Barclays is yet to decide if it too will take part, if it does need to, it wants to have capital available to pay for joining the insurance scheme rather than having to pay in shares as RBS and Lloyds have been forced to do.

In a statement last week, Barclays said:

"Barclays notes press comment regarding the potential disposal of iShares and confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the Group's portfolio of businesses.

"Barclays also confirms that it is in dialogue with HM Treasury and FSA regarding its potential participation in the Government's Asset Protection Scheme. Barclays' decision whether and to what extent to participate in the scheme will be based on the economic merits to shareholders of any such participation."

The iShares business had previously been valued at around £3.5billion, but according to the Financial Times today, the Goldman Sachs bid could be worth as much as £4.5billion.

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