Bloomberg and Reuters are reporting that Bank of America Corp. (BAC) and PNC Financial Services (PNC) have sold a large part of their stakes in BlackRock, Inc. (BLK), the world’s largest asset manager.
The sale was the largest public offering in the U.S. this year. BlackRock said the banks, which are their two largest investors, priced an offering of just over 51 million shares — more than previously expected — for $163 each.
The secondary offering was completed at a 3.6 percent discount to BlackRock’s closing share price on Monday at $169.09.
BlackRock, which oversees about $3.4 trillion in client assets, last week said it planned to offer some 42 million shares to allow the two banks to reduce their stakes in the New York-based firm. BlackRock will not receive any proceeds from the offering.
Before the sale, Charlotte, North Carolina-based Bank of America held 34 percent of BlackRock. The bank got its stake through its acquisition of Merrill Lynch & Co. last year.
According to an earlier offering document, Bank of America planned to offer 34.5 million shares, reducing its stake in BlackRock to as little as 12.6 percent.
PNC, based in Pittsburgh, controlled 24 percent. The company was BlackRock’s owner before the fund manager went public in 1999.
Analysts had been expecting the banks to trim their holdings in BlackRock. The new international Basel III capital requirements effectively prevent banks from holding big stakes in other companies as part of a series of reforms intended to prevent another financial crisis.
Some of the stock sold by the banks was converted from preferred shares.
BlackRock said Bank of America plans to sell an additional 2.45 million shares directly to an institutional investor at the offering price. Bank of America also granted the underwriters a 30-day option to purchase an additional 5.21 million to meet further demand.
BlackRock fell to as low as $163.65 on electronic markets before rising to $164.77 at 7:59 p.m. in New York. Units of Bank of America, Morgan Stanley and Barclays Plc underwrote the deal.
Barclays, based in London, owns 20 percent of BlackRock, a stake it obtained as part of its deal to sell its investment unit to the firm in December.
