Barclays Announces Pricing Of Offering Of BlackRock Stock

Further to the announcement on 21 May 2012, Barclays Bank PLC (‘Barclays’) announces that it has agreed to sell 26,211,335 shares of common stock of BlackRock, Inc. (‘BlackRock’) in an underwritten public offering at a price of US$160.00 per share. In addition, as previously announced, BlackRock will repurchase 6,377,552 shares from Barclays at US$156.80 per share, for an aggregate purchase amount of $1.0 billion.

In connection with the offering, the underwriters have been granted an option to purchase up to 2,621,134 additional BlackRock shares at the price payable by the underwriters in the offering, exercisable within the next 30 days. If the underwriters fully exercise their option to purchase additional shares, the offering and repurchase will together result in the disposal of Barclays entire holding in BlackRock shares.

Barclays received shares in BlackRock in December 2009 as part of the consideration for the disposal of Barclays Global Investors to BlackRock. Barclays currently holds BlackRock common stock and Series B convertible participating preferred stock (which will convert into common stock automatically upon sale), together representing a 19.6% economic ownership interest.

In September 2011, Barclays investment in BlackRock was written down to a fair value of £3.4 billion. The subsequent increase in value of the stake has been taken to equity. For regulatory capital purposes the increase is not recognised in Barclays core tier 1 capital. On disposal, Barclays expects to receive net proceeds of $5.5 billion (£3.5 billion) (assuming full exercise of the underwriters’ option) leading to a gain on sale of £0.2 billion being recognised in the income statement.

Proceeds from the sale will be retained in the business. Excluding the gain on sale, the impact of the disposal on Barclays earnings per share is not expected to be material. The sale is expected to cause an uplift to Barclays core tier 1 ratio of 5bps.

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