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.

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.