New bidders for iShares step up

New private equity bidders have emerged for Barclay's sought-after iShares business, including BC Pa...

New private equity bidders have emerged for Barclay's sought-after iShares business, including BC Partners.

Other media reports say Apax Partners and Hellman & Friedman, both private-equity players who had shown interest in the initial round of bidding, have also re-emerged.

Last month the firm announced the sale of it San Francisco-based exchange traded fund business for £3bn ($4.4bn) to private-equity firm CVC Capital Partners.

The deal included a sale provision that allows Barclays to shop around for a better offer for iShares from a third party for at least 45 days, though if it decides not to sell to CVC, Barclays Global Investors, the firm's asset management arm, will pay a fee of $175m. The shop-around provision expires on June 18.

Barclays spokeswoman Sarah McDonald acknowledges "there has been a lot of interest" but declined to comment further.

Officials at BC Partners declined to comment, but a report in The Independent claimed the firm tabled a bid worth £3.5bn. Caroline Villier, spokeswoman for Hellman & Friedman, also declined to comment, while Ben Harding, spokesman for Apax, could not be immediately reached.

The British bank sold iShares in an effort to raise cash to avoid requiring an injection of funds from the Government.

The bank will provide $3.1bn in debt to help finance the deal and Barclays will maintain a participation interest that entitles it to receive 20% of CVC's gains on the business, in cash, if certain return thresholds are met. Officials at Barclays had expected the deal with CVC to be finalised in the third quarter of 2009.