Why PNC Is Selling Its Stake in BlackRock
PNC Financial Services Group (NYSE: PNC), the holding company of PNC Bank, grabbed headlines by announcing its intention to sell its roughly $17 billion stake in BlackRock (NYSE: BLK), the world's largest asset manager. The bank, which has $412 billion in assets, will conduct the sale of its 34.8 million common and preferred shares of BlackRock (22.4% ownership) through a registered offering and buyback. BlackRock has agreed to repurchase $1.1 billion worth of its stock from PNC upon completion of the offering.
The sale will end a storied partnership between PNC and BlackRock that began about 25 years ago when the bank bought the business from Blackstone Group's then-leader, Steve Schwarzman. The deal, which will add plenty of cash to PNC's coffers, occurs at an uncertain time, as banks are bracing for loan losses due to the coronavirus pandemic. The question is, what is PNC's plan for its new pile of cash? Is it adding to its rainy day fund or thinking more opportunistically?
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Source Fool.com
