PNC Financial (PNC - Free Report) recently announced the completion of the sale of its ownership stake in BlackRock, Inc. (BLK - Free Report) . The company sold 31.6 million shares of BlackRock at a price of $420 per share.
Notably, the underwriters also exercised their previously-announced option to purchase an additional amount of BlackRock shares. Blackrock’s repurchase of 2.65 million shares from PNC Financial at a price of $414.96 per share was also completed.
With the conclusion of this sale and the exercising of the option by the underwriters, PNC Financial sold its entire holding in BlackRock, excluding 500,000 BlackRock shares which the bank has retained for donating to the PNC Foundation by the end of this June.
PNC Financial made an investment in BlackRock in 1995. The stake was in the form of common stock and convertible participating preferred shares that shall convert to common stock upon selling.
Per PNC Financial management, this is the right time to divest its stake in BlackRock and realize a substantial return on the investment. Moreover, this stake sale will bolster the bank’s balance sheet and liquidity position.
Also, the divesture of stake in BlackRock will free PNC Financial from any regulatory obligations associated with the ownership of a large position in another diversified financial services company.
Shares of PNC Financial have recorded a year-to-date fall of 39.1% compared with the 43.5% decline recorded by the industry.
Currently, PNC Financial carries a Zacks Rank #5 (Strong Sell).
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