UK - Barclay is tight-lipped on a report that claims the firm will consider accepting bids for the whole of its asset management arm, Barclays Global Investors.
A Barclays spokeswoman in London said the firm will not comment on the report or the status of the competing iShares bids it has received.
Last week, the firm announced it will sell iShares for $4.4bn to CVC Capital Partners, but a clause in the sale contract allows Barclays to, as of today, receive bids from other potential suitors for "iShares and potentially other related businesses" for the next 45 days. If Barclays goes with another offer, BGI will pay CVC a $175m break-fee. (Global Pensions, 9 April 2009)
At least one analyst said it was unlikely Barclays would sell BGI. Bruno Paulson, analyst at Sanford C. Bernstein called the sale "a big if."
Paulson said, "I'd be surprised if they were to sell," adding that the rest of BGI is a capital intensive business with relatively slow growth, unlike iShares. "I think it would be difficult for a private equity firm to buy and I don't think anyone else has the money," he said.
Paulson said that if Barclays were to sell BGI, the unit, a quantitative manager with heavy indexing capabilities, would likely sell for less than iShares, because of the slow-growth structure of the business.
Some analysts believed the iShares price was unreasonably high.
Director at Panmure Gordon & Co. Sandy Chen said: "The acquisition price of $4.4bn puts the iShares disposal on a 10.1x EBITDA multiple, which strikes us as quite high, especially given the possibility of further declines in AUM and the prospect of limited cost synergies for CVC."
Meanwhile, iShares executives are already making plans to grow its business once the sale to CVC is complete. Rory Tobin, global co-chief executive said yesterday the firm will look for external candidates to fill some high-level positions, like that of a chief financial officer, which used to be covered by Barclays.
Officials will also move ahead with plans to expand in Europe, the Middle East and Latin America as well as new product offerings. (Global Pensions, 14 April 2009)
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