Barclays is in talks to sell its prized asset management arm, a person familiar with the matter said, after the auction of its iShares unit generated more interest in parts of the British bank.
The bank is discussing a sale of San Francisco-based Barclays Global Investors (BGI) asset management operations for about $10 billion, the person said, having drawn a raft of suitors for iShares, the exchange-traded funds unit that is part of BGI.
Potential bidders for BGI, renowned for the number of PhDs among its staff, include U.S. money manager Blackrock, the Financial Timessaid. Bank of New York Mellon is also in talks about BGI, Bloomberg reported.
Barclays, Blackrock and BNY Mellon declined to comment.
“If a sale of BGI as a whole were on the table at the price north of $10 billion I would regard that as a good price in this market," said Ian Gordon, analyst at Exane BNP Paribas.
“I don't think Barclays' core objective is to sell BGI, but if they are offered a price for any business that is accretive to shareholders they are duty-bound to look at it."
Selling BGI would derail a separate sale of iShares, which Barclays has earlier agreed to sell to buyout firm CVC Capital Partners for £3 billion. Barclays is allowed to look for other bidders until June 18th.
By 10.20am Barclays shares had jumped 9.2 per cent to 276 pence, to value the bank at about £23 billion. The shares have soared fivefold since January.
The talks over BGI, which likes to boast about the work done by its research lab, have emerged as Barclays attempts to lure more offers for iShares before the June 18th deadline.
BGI is staffed by academics covering a wide range of disciplines from economics to engineering, physics and computer science, with graduates from the nearby University of California at Berkeley attracted to its collegiate atmosphere.
Senior management and other staff at BGI would reap a windfall if the business was sold, due to a lucrative equity ownership plan (EOP) dating back to 2000.
The staff are in line to get a cash payout under the iShares deal, which would be bigger if all the business is sold.
Employees own 4.5 per cent of BGI, rising to 10.3 per cent if options are exercised. They include Bob Diamond, president of Barclays and head of BGI, who was due to receive £4.7 million in cash under the agreed iShares sale.
Reuters