Barclays shares rise on back of £3billion iShares deal

14 April 2009 / by Rachael Stiles
After weeks of negotiation and looking for a buyer, Barclays has announced an agreement for the sale of iShares, its fund management businesses, for £3billion.

Barclays shares rose 15.34 per cent (24.2p), to 182p after the deal was announced at the end of last week.

The new owner of iShares is Blue Sparkle LP, a new limited partnership established by CVC Capital Partners Group, which bought it for approximately $4.4billion (£3billion).

Barclays has agreed to lend CVC $3.1billion to buy the business, retaining 51 per cent of the debt for five years.

CVC will take ownership of iShares in November, providing Barclays does not get a better offer by June 18, which Barclays would be allowed to accept as part of a 'go shop' clause in the deal, but it would have to pay CVC up to $175million if it chooses to sell to a different buyer.

The sale of iShares, part of Barclays Global Investors, will provide cash to help Barclays shore up its balance sheet.

The net gain of $2.2billion net gain (£1.5billion) will help the bank to weather the rest of the recession, after the Financial Services Authority gave it a clean bill of health and said it would not have to take part in the Government's Asset Protection Scheme to insure its toxic debts, as other banks have done.

Barclays shares held their value this morning, opening at 186.30p.

© Fair Investment Company Ltd