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Barclays eyes up a stake in BlackRock

BARCLAYS was last night awaiting an offer from Bank of New York Mellon for Barclays Global Investors (BGI), as US firm BlackRock edged towards the brink of a cash-plus-equity deal for the asset management unit.<br /><br />Barclays and BlackRock are in talks over a deal that would see the bank merge BGI with BlackRock and take a 20 per cent equity stake in the combined group.<br /><br />Barclays president Bob Diamond, who will share in a $585m (&pound;366m) windfall for employees if the deal goes through, would get one of two seats for Barclays executives on the board of the new entity, which would be the world&rsquo;s largest money manager.<br /><br />The deal would also see investors from the Middle East provide financial backing, with the Qatar Investment Authority, a major Barclays investor, among parties in discussions over providing BlackRock with $3bn (&pound;1.9bn) in exchange for a 12 per cent stake.<br /><br />But Bank of New York Mellon is mulling a counter bid, which would have to be made before the period in which Barclays can take offers ends on 18 June, a condition of its initial agreement to sell BGI&rsquo;s exchange traded funds unit iShares to CVC Partners for $4.2bn.<br /><br />BGI has been valued at around $13bn. A merger between BlackRock with Barclays Global Investors (BGI) will create the world&rsquo;s largest asset manager with funds under management of more than $2 trillion ($1.24 trillion).<br /><br />The merger would catapult the new entity to the top of the pile of money managers by assets under management, a list currently headed by State Street Global Advisors.<br /><br />BlackRock, led by chief executive Larry Fink is the world&rsquo;s second-largest asset manager, with funds worth $1.28 trillion, while BGI occupies seventh place with just over $1 trillion.