Friday, April 10, 2009

Barclays Sells iShares To CVC for $4.4 Billion

. Friday, April 10, 2009

By stockOzone team

Barclays said that it has agreed to sell its U.S.-based asset management business iShares to European private equity firm CVC Capital Partners Group, booking a net gain of $2.2 billion from the sale.

Barclays will finance $3.1 billion of the total $4.4 billion purchase price and will be entitled to receive 20 percent of the equity return from iShares once CVC has achieved certain minimum returns.

The sale will boost Barclays' capital after it turned down a place in the British government's program to insure toxic assets, choosing to avoid state influence in its business. The British Treasury increased its stake in both the Royal Bank of Scotland Group and Lloyds Banking Group after they received government guarantees.

IShares, the world's biggest manager of exchange-traded funds, is part of San-Francisco-based Barclays Global Investment.

Disclosure: Author does not own any of the stocks discussed here.

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