Barclays Ready to Announce iShares Deal: WSJ

April 8, 2009 ( - Barclays PLC is expected to announce as soon as tomorrow that it has reached an agreement to sell iShares.

The Wall Street Journal, citing people familiar with the matter, says that Barclays’ iShares exchange-traded funds (ETF) business will be sold to European private-equity firm CVC Capital Partners.   According to the report, the deal is likely to reap about £3 billion and leave Barclays with a roughly 20% stake in the business – cash that the British bank can use to increase its buffer against credit losses as the economy worsens.    

The WSJ says that Barclays agreed to lend CVC as much as 70% of the purchase price.

Barclays hopes to announce the deal Thursday, but it could still be delayed, according to the report.   The sale caps several weeks of talks with a variety of interested buyers, including, according to the WSJ, Goldman Sachs Group Inc., Bain Capital LLC, and Colony Capital LLC.   Barclays said last week that CVC had emerged as the preferred bidder (see  CVC Capital Partners in Talks to Buy iShares Business ).

The WSJ said that people close to the matter initially indicated the deal could be completed last week – but that the details of separating the iShares unit from San Francisco-based Barclays Global Investors, the bank’s asset-management arm, proved to be more complicated than anticipated.

The iShares unit had £226 billion of assets under management at the end of last year.