Barclays Reportedly Considering Broader BGI Deal

While considering selling its iShares unit to the CVC Capital Partners Group equity firm, Barclays has also received inquiries from other possible suitors for its Barclays Global Investors asset management business.

Bloomberg reported inquiries for a broader deal from BlackRock Inc. and Bank of New York Mellon for a price analysts estimate at as much a $10 billion—more than double the $4.4 billion Barclays would be in line to get by selling iShares.

A deal negotiated for the iShares business gives Barclays until June 18 to receive other iShares offers. Barclays agreed April 9 to sell iShares to CVC Capital, a London-based buyout firm. The bank must pay CVC a $175 million break fee if it terminates the deal (see “Barclays Still Entertaining Suitors for iShares).

Barclays said Friday it had received “unsolicited interest” in BGI, as well as inquiries about iShares, since the CVC deal was announced, Bloomberg reported. There is “no certainty” the discussions will result in a deal, the London-based company said in a statement, without naming the potential bidders.

“Without doubt they are doing this to bolster capital ratios and convince people they don’t need more equity,” Richard Buxton, head of U.K. equities at London-based Schroders Plc, told Bloomberg. “But you end up with a less diversified business.’

Bloomberg said Barclays has shunned government funds, instead boosting capital by selling shares and assets after $18.6 billion of credit losses and writedowns during the global financial crisis.

BlackRock is the biggest publicly traded U.S. asset manager and oversees $1.3 trillion, mostly for institutions. BNY Mellon is the world’s largest custody bank and manages $881 billion of assets for clients through mutual funds and institutional accounts.