Barclays Plc has said it's in exclusive talks to sell the iShares exchange-traded funds unit to CVC Capital Partners Ltd. of London, according to Bloomberg and other news sources. The sale price for an 80-percent stake may be about $4.3 billion.
Barclays will keep the division's securities-lending operation, according to a statement. It will also retain a 20 percent stake in iShares and may provide loans equal to about two-thirds of the purchase price to help finance the deal, insiders said.
Selling iShares may help Barclays avoid tapping government funds after the bank opted out of the Treasury's asset insurance program. Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc slipped into government control after taking taxpayer funds, Bloomberg reports.
IShares, which had about $325 billion in assets under management at the end of last year, is the largest ETF manager. The unit is part of San Francisco-based Barclays Global Investors, which had $1.5 trillion dollars of funds under management at the end of 2008.
CVC started a team to invest in financial services companies in September, putting managing partner Jonathan Feuer in charge of the unit, according to Bloomberg.
Other firms that had expressed interest in buying iShares included Colony Capital LLC and Bain Capital LLC, two U.S. private equity firms; New York-based Goldman Sachs Group Inc.; and a group of LBO firms that included Hellman & Friedman LLC of San Francisco and London-based Apax Partners Worldwide LLP, according to people familiar with the discussions.