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May 22, 2012 4:57 AM GMT+0800 Barclays Plc (BARC), the U.K. s second- largest bank by assets,will sell its entire $6.1 billion stake in BlackRock Inc. (BLK)before the latest round of Basel rules stops it from counting theholding as capital. BlackRock, the fund manager started by former mortgage-bond traderLaurence Fink, will buy back as much as $1 billion of shares fromBarclays as part of the transaction, the London- based bank said ina statement today. The British bank took the 19.6 percent holdingwhen it sold Barclays Global Investors to BlackRock in December2009 for about $15.2 billion. The latest rules from the Basel Committee on Banking Supervisionwill force the lender to set aside capital against the stake tocushion itself against any decline in the value of the holding.BlackRock has slipped about 24 percent since the purchase wascompleted, prompting Barclays to write down the value of its stakein 2011 to about 3.4 billion pounds ($5.3 billion). It s a less attractive asset under the Basel III rules, saidIan Gordon, an analyst at Investec in London who rates the bank abuy. Barclays can remove it from that debate. Barclays, Morgan Stanley (MS) and Bank of America Corp. areoverseeing the sale of about 29 million shares to money managers,including the over-allotment option. They expect to set a price forthe stock on May 23, according to a term sheet for the offering. BlackRock fell 2.4 percent to $167.73 in New York. The stock closedat $147.72 on May 22, 2009, when BlackRock made the non-bindingoffer for BGI, before rising 54 percent to $227.08 the day beforethe purchase was completed that year. Barclays increased 2.2percent to 180 pence in London trading today. A further statement will be issued following the pricing of theoffering, Barclays said. A spokesman for the lender in Londondeclined to comment beyond today s statement. Good Anchor BlackRock taking $1 billion of this gives Barclays a good anchorinvestor to start this, said Christopher Wheeler, a London-basedanalyst at Mediobanca SpA. What this does for Barclays is get ridof a lot of volatility in this holding. Regulators are forcing banks to assign higher risk weightings toshares in financial companies to ensure they are adequatelycapitalized individually and discourage them from owning oneanother. By boosting those weightings, regulators can force banksto set aside more capital, reducing profitability. Barclays Chief Executive Officer Robert Diamond is selling assetsand focusing on the lender s most profitable operations to helphim meet his 13 percent target for return on equity, a measure ofprofitability. He sold the bank s consumer and commercial bankoperations in Russia in October and a private equity unit inNovember. Diamond will step down from BlackRock s board followingthe sale, the fund manager said today. Biggest Asset Manager BlackRock paid Barclays 37.6 million common and preferred sharesand $6.65 billion in cash to acquire the unit in 2009. BlackRock sshares surged from the time it announced the transaction in June2009 until the purchase was completed in December that same year,as the deal made the firm into the world s biggest asset managerand added passive products such as the iShares exchange-tradedfunds to its offerings. BlackRock s relationship with Barclays has always been strongand will remain so, Brian Beades, a spokesman for BlackRock, saidin an e-mailed statement today. Our plan to repurchase sharesdemonstrates BlackRock s commitment to effectively executing ourcapital management strategy and returning cash to shareholdersthrough buybacks and dividends. BlackRock said last May it had agreed to buy back Bank of AmericaCorp. (BAC) s remaining stake of 13.6 million shares for $2.5billion. The bank acquired its stake in the New York-based moneymanager through the purchase of Merrill Lynch & Co. in 2009. I am an expert from tr-fabrics.com, while we provides the quality product, such as PU Leather Cloth , Jean Cloth Fabric, Jean Cloth Fabric,and more.
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