PNC to divest remaining stake in BlackRock
PNC Financial Services Group in Pittsburgh is planning to sell its stake in BlackRock.
The $446 billion-asset PNC said in a press release Monday that it would divest its 22.4% stake through a registered offering and a repurchase agreement with the New York money manager.
PNC plans to sell 34.8 million shares of BlackRock stock. BlackRock agreed to buy $1.1 billion of its stock after an offering is completed. PNC said it will donate its remaining 500,000 BlackRock shares to the PNC Foundation by the end of the second quarter.
PNC disclosed in its latest quarterly filing that the stake had a market value of $15.3 billion and a carrying value of $8.7 million on March 31. The stake contributed $157 million to PNC's first-quarter earnings. William Demchak, PNC’s president and CEO, is a BlackRock director.
"As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment," Demchak said in the release. "We feel the time is now right to do just that, realizing a substantial return on our investment, significantly enhancing our already strong balance sheet and liquidity.”
Demchak said the divestiture will eliminate any regulatory obligations tied to owning a large stake in another diversified financial services company.
PNC, which has owned a stake in BlackRock since 1995, has sought to cash out before.
The company disclosed in 2013 that it was looking for a buyer, and Demchak said in September 2016 that a planned sale was the “worst-kept secret on Wall Street.”