According to a PNC news release, the company currently holds a 22.4% stake in BLK. That’s through a combination of comm shares and Class B shares of the company’s stock. The total number of shares that it owns is 34.8 million.
PNC says that its intent is to sell these shares to underwriters, as well as back to BlackRock through its buyback program. There will also be an option available for underwriters to purchase additional shares from it. On top of that, the company is donating 500,000 shares of BLK stock to the PNC Foundation.
If all the underwriters buy the additional shares of BLK stock from PNC, the company will no longer have a stake in the company. That would bring an end to its investment in BlackRock that started back in 1995.
When it comes to the sale of BlackRock shares, PNC notes that there are a couple of benefits. The first is, of course, the funds it will obtain from cashing in on its investment. However, it also notes that the sale would remove any regulatory obligations the company is under due to investing in another financial services company.
William Demchak, chairman, president and CEO of PNC, said this about the BlackRock news.
“As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment. 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.”
BLK stock was down 8% and PNC stock was down 2.1% when the markets closed on Tuesday.
As of this writing, William White did not hold a position in any of the aforementioned securities.