The PNC Financial Services Group, Inc. announced its intent to sell its investment in BlackRock, Inc. through a registered offering and related buyback by BlackRock.

PNC Announces Intent To Sell Its Investment In Blackrock https://t.co/9TqraKyw0B

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A preliminary prospectus supplement relating to the offering of BlackRock shares will be filed by BlackRock with the U.S. Securities and Exchange Commission. PNC currently holds 34.8 million common and Series B preferred shares of BlackRock, representing 22.4% ownership.

In connection with the offering, the underwriters will have an option to purchase up to an additional amount of BlackRock shares, exercisable within 30 days following the pricing of the offering.  In addition, BlackRock has agreed to repurchase $1.1 billion of its stock from PNC conditional on completion of the offering.  If the offering and repurchase are completed and the underwriters fully exercise their option to purchase additional shares, the offering and repurchase will together result in the sale of PNC’s entire holding in BlackRock, excluding 500,000 BlackRock shares that PNC is retaining for a donation to the PNC Foundation by the end of the second quarter of 2020.

PNC originally purchased BlackRock in 1995 and the two companies have had a mutually beneficial relationship for more than 25 years.

“BlackRock’s long track record of strong performance and growth has created significant value since PNC acquired our stake in the company.  As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment,” said PNC Chairman, President and Chief Executive Officer William S. Demchak.  “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, and leaving PNC very well-positioned to take advantage of potential investment opportunities that history has shown can arise in disrupted markets.”

In addition to the direct economic benefit of the sale, Demchak said the divestiture of PNC’s stake in BlackRock will eliminate any regulatory obligations associated with the ownership of a large position in another diversified financial services company.

The transaction has been approved by PNC’s Board of Directors.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The shares are being offered pursuant to an automatically effective shelf registration statement (including a base prospectus) that has been filed by BlackRock with the U.S. Securities and Exchange Commission (the “SEC”).  A preliminary prospectus supplement relating to and describing the terms of the offering will be filed by BlackRock with the SEC and will be available on the SEC website at www.sec.gov.

Source: PNC