• More reports on:
  • M&A

Barclays considering offers for asset management arm

14 Apr 2009

1

Barclays says it will  consider offers for its entire asset management arm as part of attempts to extract a higher bid for iShares, the exchange-traded funds unit it agreed to sell last week for £3 billion.

Barclays has indicated its willingness to listen to offers for Barclays Global Investors (BGI), which has more than £1 trillion under management, as part of a so-called "go-shop" clause to to "solicit or consider proposals for a superior transaction" contained in the iShares deal announced last week.

Barclays said on Thursday it had agreed to sell its iShares asset management business, which sits within BGI, to private equity firm CVC Capital Partners for £3 billion ($4.42 billion), but kept the right to hunt for a better deal for two months. (See: Barclays in talks to sell iShares asset management unit for $4.3.billion)

Under the deal, Barclays has until 18 June to ''solicit or consider proposals for a superior transaction involving iShares and potentially other related businesses''. Barclays had previously suggested it would not sell the whole of BGI, valued in the accounts at around £8 billion.

A number of parties are interested in acquiring BGI, although none has made a formal approach to Barclays and the bank is not engaged in any live talks about such a transaction. Despite the clause in Thursday's announcement, it remains unclear whether prospective bidders have the necessary resources to buy all of BGI.

This week, Barclays will begin canvassing interest in iShares from a number of other international fund managers, including Charles Schwab, Fidelity, Vanguard and Deutsche Bank, which owns a large exchange-traded funds business called db x-trackers. Goldman Sachs and Bain Capital, the private equity group, also remain interested.

Barclays has agreed to pay CVC a break fee of $175 million (£119 million) if it terminates the sale agreement, meaning that to be attractive, any counter-offer would need to be worth well over $4.6 billion, according to people close to Barclays.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more