Barclays to Shed Its $6 Billion Stake in BlackRock

Barclays PLC announced it would sell its entire holding in BlackRock Inc. via a registered offering and a $1 billion buyback by BlackRock.

A preliminary prospectus supplement was filed Monday by BlackRock with the Securities and Exchange Commission (SEC). BlackRock has agreed to repurchase up to $1 billion of its stock.

The remainder of the stake will be listed on a stock exchange. The pricing of the stock listing is expected to be completed this week, people familiar with the matter said.

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Barclays’ stake consists of BlackRock common stock and Series B convertible participating preferred stock, which together represent a 19.6% economic ownership interest in BlackRock.

In September, Barclays’ investment in BlackRock was written down to a fair value of $5.3 billion (£3.4 billion). The subsequent increase in the valuation of the stake has been taken to equity. For regulatory capital purposes, the increase is not recognized in Barclays core Tier 1 capital. The market value of Barclays’ investment, based on the closing price of BlackRock common stock of $171.91 on Friday and assuming conversion of preferred stock, was $6.1 billion.

 

 

 

 

 

DOL Recovers Retirement Plan Assets for Participants

Two companies settled lawsuits with the Department of Labor (DOL), agreeing to restore retirement assets to participants.

HBMG, an information technology firm in Austin, Texas, and its president, Manuel Zarate, have agreed to settle a lawsuit alleging the company failed to transfer employee retirement fund contributions into its 401(k) program. The DOL claims that Zarate diverted the retirement plan funds for his own benefit.  

Under the settlement, HBMG and Zarate will restore about $65,000 in employee contributions, plus in­­terest. Zarate can no longer have fiduciary responsibilities for any plan covered by ERISA, the Employee Retire­­ment Income Security Act. HBMG’s 401(k) plan will be dissolved and participants may roll over their contributions to other retirement plans as soon as the monies are paid.  

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North Coast Wood Products in Mentor, Ohio,  has settled a lawsuit alleging the company’s owner illegally diverted money from 11 participants in profit–sharing plan of the now-defunct company. The former employees will collect more than $100,000, compensation they should have received when the company folded in 2005.  

The DOL claims North Coast’s owner, Harvey Fishleigh, transferred retirement plan assets to his son during a three-year period. Under the terms of the settlement, the Fishleighs must also pay interest on the diverted funds, bringing the total payout to $114,177. The Fishleighs will pay for a fiduciary to oversee the plan’s funds.

 

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