PNC, an American bank based in Pittsburgh, announced yesterday (May 11) its intent to sell the 34.8m shares it owns in Blackrock, which represents a 22.4 per cent ownership in the firm or a $17bn (£13.7bn) stake.
William Demchak, chief executive of PNC, said it was the “right time” to realise the “substantial return” on its investment in Blackrock, a move that would leave PNC “well-positioned to take advantage of potential investment opportunities” in the currently disrupted markets.
He added: “BlackRock's long track record of strong performance and growth has created significant value since PNC acquired our stake in the company.
“As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment.”
Blackrock will buy back $1.1bn (£890m) of its stock while 500,000 of Blackrock shares will be retained for a donation to the PNC Foundation later this year.
PNC originally purchased Blackrock in 1995 and shares in the firm have soared by about 4,000 per cent since as it grew to become the world’s biggest asset manager.
In addition to the economic benefits, Mr Demchak said the sale of PNC's stake in Blackrock would eliminate any regulatory obligations tied with owning a large position in another diversified financial services company.
The transaction has already been approved by PNC’s board of directors.
imogen.tew@ft.com
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