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BlackRock said to lead in BGI deal

BARCLAYS Plc is in talks to sell Barclays Global Investors, the British bank said yesterday, with United States fund manager BlackRock Inc the frontrunner to land the asset manager, according to people familiar with the matter.

BlackRock and Bank of New York Mellon are both in talks to buy BGI in a deal that could be worth about US$12 billion and might come early this week, the sources said, who asked not to be named as the talks are confidential.

The deal could see Barclays take a stake of up to 20 percent in the enlarged asset manager in a deal structured similarly to its planned sale of iShares, the sources said.

Barclays said yesterday that it had received proposals for BGI and iShares from a number of parties, including BlackRock, and was continuing talks. But there were still "a number of significant open issues which could affect the nature and terms of any transaction," it said.

Blackrock confirmed in a separate statement that it is still in talks with Barclays about its potential purchase of BGI but said that there was no certainty a transaction would be agreed upon "or, if agreed upon, completed."

Barclays agreed to sell iShares, which is part of BGI, to buy-out house CVC Capital Partners for 3 billion pounds (US$4.8 billion) in April, but a "go shop" clause allows it to seek higher offers until June 18.

Barclays shares were roughly flat, shortly after opening yesterday. They closed at 285 pence on Friday.

Bankers speculated last month that the bank would be willing to sell BGI if offers approached the US$12 billion price level.

BlackRock is likely to get funding for a deal from Middle East investors, possibly including some Barclays shareholders, according to media reports.

The Qatar Investment Authority and the Abu Dhabi Investment Authority are in talks alongside the Kuwait Investment Office to inject US$3 billion in BlackRock for a 12 percent stake, the United Kingdom's Sunday Telegraph newspaper said.


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