Barclays Global Investors apparently was not satisfied with the auction of their iShares exchange traded fund (ETF) family, claiming bids were too low, however, rumors are flying about a private equity firm being first up for consideration.
A.L. of Mutual Fund Wire says there are reports of a private equity firm, CVC Capital Partners, who is interested in the business, with a price tag of $4.29 billion. Maureen Brody of Ignites reports that with 180 ETFs and $240 billion in assets under management, iShares dominates the ETF marketplace.
Scott Burns for Morningstar says that how much such a sale would impact Barclays’ operations depends on how much leverage is used to finance the purchase. Burns also doesn’t think that iShares’ market presence will be any smaller, even if private equity is helming it, because it would be in the best interest of any buyer to keep it growing and maintain its position.
Barclays’s target valuation for iShares is $6.5 billion, and the provider will finance 80% of the transaction to keep a stake in the product. The deal is expected to be completed by the end of the week.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.