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Barclays may offload iShares
By Jon Menon |
March 17, 2009, Tuesday
|
Print Edition
Print Edition
BARCLAYS Plc, Britain's third-biggest lender, said that it had a "strong start" to 2009 and continues to perform well as it tries to bolster its capital without giving a stake to the government.
Barclays also said that it has held talks about the sale of iShares, the exchange-traded funds unit of Barclays Global Investors. No decision on the sale of any assets has been made, the London-based bank said in a statement.
Barclays rose as much as 15 percent in London trading as it joined other banks in announcing a positive start to the year.
Barclays is exploring the sale of iShares after Royal Bank of Scotland Plc and Lloyds Banking Group Plc boosted their capital by accepting state aid that allowed the government to increase its stake in each bank to as much as 75 percent.
"They have to get some capital as the world has changed," said Simon Maughan, from MF Global Securities Ltd. "The market is talking about a sale price of 4 billion pounds (US$5.62 billion) for iShares, which is 60 percent of Barclays' market capitalization," indicating the stock may be "ridiculously cheap."
Barclays also said that it had begun talks with the Treasury about taking part in the asset-protection program.
Asset protection
The bank said that its participation will be based on the "economic merits" to shareholders. Barclays will only enter the program if it can do so without giving up a stake to the government, according to five analysts surveyed by Bloomberg News.
In January the bank said that it wouldn't need government funding because of record revenue from Barclays Global Investors and the acquisition of Lehman Brothers Holdings Inc's North American unit.
Barclays Global Investors had 1.04 trillion pounds of funds under management at the end of 2008, including 226 billion pounds at iShares.
"In these markets you have to be realistic about the affordability and the funding" for any potential purchaser of iShares, said Mike Trippitt, an analyst at Oriel Securities in London.
Barclays also said that it has held talks about the sale of iShares, the exchange-traded funds unit of Barclays Global Investors. No decision on the sale of any assets has been made, the London-based bank said in a statement.
Barclays rose as much as 15 percent in London trading as it joined other banks in announcing a positive start to the year.
Barclays is exploring the sale of iShares after Royal Bank of Scotland Plc and Lloyds Banking Group Plc boosted their capital by accepting state aid that allowed the government to increase its stake in each bank to as much as 75 percent.
"They have to get some capital as the world has changed," said Simon Maughan, from MF Global Securities Ltd. "The market is talking about a sale price of 4 billion pounds (US$5.62 billion) for iShares, which is 60 percent of Barclays' market capitalization," indicating the stock may be "ridiculously cheap."
Barclays also said that it had begun talks with the Treasury about taking part in the asset-protection program.
Asset protection
The bank said that its participation will be based on the "economic merits" to shareholders. Barclays will only enter the program if it can do so without giving up a stake to the government, according to five analysts surveyed by Bloomberg News.
In January the bank said that it wouldn't need government funding because of record revenue from Barclays Global Investors and the acquisition of Lehman Brothers Holdings Inc's North American unit.
Barclays Global Investors had 1.04 trillion pounds of funds under management at the end of 2008, including 226 billion pounds at iShares.
"In these markets you have to be realistic about the affordability and the funding" for any potential purchaser of iShares, said Mike Trippitt, an analyst at Oriel Securities in London.
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