Come June, Bank of America will no longer have a stake in BlackRock [see profile]. This morning brought word that BlackRock is repurchasing Bank of America's remaining stake in the New York City-based asset manager for $2.54 billion. BlackRock is buying back 13.5 million of its Series B Convertible Preferred Shares at $187.65 per share.
The repurchase announced this morning is expected to close on or about June 1.
BlackRock plans to fund the repurchase through available cash and a total of $2 billion of commerical paper, medium-term and long-term debt.
"This stock repurchase and our recent dividend increase evidence our continued commitment to
enhancing shareholder value through effective use of our significant free cash flow, while maintaining our strong liquidity and capital position," said BlackRock CEO Larry Fink in a press release.
Company Press Release
BlackRock to Repurchase Shares Held by Bank of America
Companies Remain Committed to Working in Partnership on Behalf of Shared Clients
New York, May 19, 2011 — BlackRock, Inc. (the "Company") (NYSE:BLK) today announced that it has
agreed to repurchase Bank of America Corporation’s ("Bank of America") remaining ownership interest in
BlackRock totaling 13,562,878 of its Series B Convertible Preferred Shares for approximately $2.545
billion, or $187.65 per share. The shares will be retired following the close of the transaction which will be
immediately accretive to earnings per share. In connection with the transaction, Bank of America Merrill
Lynch and BlackRock have worked together to strengthen their enterprise-wide collaboration and
enhance their ongoing strategic partnership.
"This stock repurchase and our recent dividend increase evidence our continued commitment to
enhancing shareholder value through effective use of our significant free cash flow, while maintaining our
strong liquidity and capital position," remarked Laurence D. Fink, Chairman and CEO of BlackRock. "We
are pleased to have worked with Bank of America Merrill Lynch to transition their ownership stake over
the past six months, working in close partnership to realize value for all of our shareholders. At the same
time, we have reaffirmed our mutual commitment to our strategic relationship and the work we do
together to develop and deliver world-class products and services to our shared clients. Tom Montag,
President of Bank of America's Global Banking and Markets Group, will continue to serve on our Board,
underscoring the importance of, and commitment to, our partnership. We look forward to a long and
mutually beneficial relationship with Bank of America Merrill Lynch."
"There is a long history of collaboration between Bank of America Merrill Lynch and BlackRock that
focuses on providing exceptional investment solutions for our respective clients," stated Brian Moynihan,
President and Chief Executive Officer of Bank of America Corporation. “Our decision to monetize our
stake in BlackRock will have no effect on our commitment to continuing this very successful partnership."
BlackRock intends to fund the purchase of the shares through available cash and a total of $2.0 billion of
commercial paper, medium-term and long-term debt. The purchase price represents a 3.6% discount to
the average closing price for the immediately preceding 15 day trading period.
This share repurchase transaction, which is expected to close on or about June 1, 2011, is outside the
Company’s existing 5.1 million common share repurchase authorization. Immediately following the close
of the transaction, the Company’s effective pro forma fully diluted shares outstanding will total
approximately 183.5 million shares.
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional
and retail clients worldwide. At March 31, 2011, BlackRock’s AUM was $3.648 trillion. BlackRock offers
products that span the risk spectrum to meet clients’ needs, including active, enhanced and index
strategies across markets and asset classes. Products are offered in a variety of structures including
separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment
vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to
a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of March 31, 2011, the firm has approximately 9,300 employees in 26 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com.
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