Barclays gets 1bn BGI boost

BARCLAYS last night cheered a &pound;1.3bn boost from the expected sale of its asset management arm to US fund manager BlackRock, due to a 62 per cent hike in the fund manager&rsquo;s shares since the deal was struck in June.<br /><br />The bank said it had completed the $15.2bn (&pound;9.1bn) sale of Barclays Global Investors (BGI) to BlackRock, creating the world&rsquo;s largest asset manager with more than $3,000bn in assets. The sale price is &pound;6.2bn higher than the value of BGI in Barclays&rsquo; accounts.<br /><br />Barclays received $6.6bn in cash and 37.567m new shares, giving it a 19.9 per cent stake in the enlarged money manager.<br /><br />Barclays&rsquo; chief executive John Varley and Barclays Capital chief executive Bob Diamond will take seats on BlackRock&rsquo;s board.<br /><br />The sale will also result in a $1bn pay-out to BGI&rsquo;s 3,500 staff, including Diamond, as part of an equity ownership plan.<br /><br />Barclays&rsquo; core tier-one ration, the key measure of capital strength, will be lifted by 0.6 percentage points to 9.2 per cent on a pro forma basis, better than the 8.8 per cent it had expected when the bank&rsquo;s third quarter results were published last month.