Report: BlackRock Wins BGI Bidding War

Money management giant BlackRock is close to announcing that it has won the bidding war for Barclays Global Investors, according to a report on the Web site of Pensions & Investments magazine.

The story, by veteran journalist Douglas Appell, said that BlackRock is expected to announce shortly that it would be BGI's new owner. The article cited unnamed sources.

Someone not connected directly to the deal told Appell that word of an agreement likely will come within days.

Sources also told P&I that CVC Capital Partners, which originally agreed to pay $4.5 billion for BGI's iShares exchange-traded funds business, would get an opportunity to raise its original bid.

The CVC deal had a window for BGI to shop itself until June 18. A P&I source thought it was unlikely that CVC would be willing to top BlackRock's $10-billion plus offer for the combined BGI franchise.

P&I estimates that a joining of BGI and BlackRock would create the world's biggest institutional money manager with more than $2.2 trillion in assets.

You can read the full story here.

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Comments

[Edward Ulys...:]

So bizarre. BlackRock's major holder is PNC Financial. Barclays is the major holder in PNC, Merrill Lynch and Bank of America. CVC is an offshoot of Citigroup, of which Barclays is a major holder. They're just moving paper around, smoke and mirrors, so folks don't figure out that the same group still controls the plantations. Barclays didn't set up the quietlyconquering.com site for nothing, although they did drop the "Quietly conquering the world of finance" slogan from their advertising. Same circus, different clowns.

Jun 06 09:37 AM

[jse17:]

It matters little who the iShares title holder becomes in that we are dealing exclusively with ETFs and subsequently basic accounting services. Let us all keep our eye on the management fee in play moving forward.

Barclays for the majority of its funds charges 0.5%. If this not inexpensive but reasonable fee structure is violated, run out the door! Who knows, perhaps even Vanguard and their low ETF fees will get the idea that single country and creative sector ETF construction is a money maker. It is not too late to enter the 21st century before it is over!

Jun 06 01:11 PM

[Pat Shuff:]

BGI's Other Appeal: Share Lending

Most of the money that BGI makes comes from securities lending," said Matt Hougan, editor of IndexUniverse.com.

online.wsj.com/article...

Is Your Fund Pawning Shares at Your Expense?

Some fund managers, acting as lending agent, keep 50% or more of the income from securities lending; there is no legal limit. "I cannot mention names," a leading investment consultant told me, "but there are funds doing securities lending where 100% of the revenues go back to the adviser."

Your fund should lend out your securities, but the proceeds should go to you. And fund managers should reinvest the collateral only in absolutely safe securities. The current system, where they keep half the gains and stick you with all the risks, has got to go.

online.wsj.com/article...

Jun 07 07:42 AM