BC Partners ups price in Barclays deal

A gatecrasher to Barclays' £3bn (€3.37bn) deal to sell fund management business iShares could net the bank another £500m (€562.7m), it was reported today.

A gatecrasher to Barclays' £3bn (€3.37bn) deal to sell fund management business iShares could net the bank another £500m (€562.7m), it was reported today.

Buy-out fund BC Partners, which is best known in the UK for acquiring the Foxtons estate agency chain, is said to have lodged an estimated £3.5bn (€3.93bn) bid, trumping last month's agreed deal with rival CVC.

Under a "go-shop" clause, Barclays retained the right to try and secure a higher bid within 45 days. CVC must be given the chance to match any higher offer, but if it declines it will receive a £175m (€196.9m) break fee.

The Sunday Times said BC's move was expected to tempt other suitors into the fray, including trade rivals such as Charles Schwab and other buy-out firms.

The iShares business has around 620 employees in 14 countries. It is part of the Barclays Global Investors (BGI) division and the world's biggest provider of exchange traded funds (ETF), with 360 products and a market share of around 47%.

An ETF is a type of investment vehicle which can be traded on exchanges in the same way as shares, and gives inexpensive and broad access to other kinds of investments. The division had £226bn (€254.3bn) of assets under management at the end of last year.

The wider BGI business was not included in the CVC sale, although it could feature in any rival offer as part of the go-shop clause.

Barclays, which has shunned the Government's bail-out schemes, put the business up for sale amid a drive to bolster its capital reserves.

Chief executive John Varley also said the business had reached a point where it could develop further independently of the bank.

Barclays president Bob Diamond, who heads up the company's investment banking arm, stands to gain up to £4.7m (€5.28m) from the current CVC deal. He has 300,000 shares and options in BGI Holdings.

Under the bank's share investment scheme, Mr Diamond and more than 200 executives own 4.5% of BGI under an arrangement approved by Barclays shareholders in 2000.

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