BlackRock says PNC to sell stake, plans $1.1 billion buyback

BlackRock Inc. said PNC Financial will exit its full investment in the world’s largest asset manager.

PNC will offer the shares in a public secondary offering, BlackRock said in a statement Monday. As part of the transaction, BlackRock will buy back $1.1 billion in the shares directly from the firm.

The decision concludes years of questions over how long PNC would hold on to its stake in BlackRock, where it was the largest holder at 22%. PNC played a crucial role in BlackRock’s history, acquiring it for $240 million in 1995. The move split it from alternative asset manager the Blackstone Group. Steve Schwarzman later called the sale a “heroic” mistake.

Now is the right time to “unlock the value of our investment” in BlackRock, PNC CEO William Demchak said in a statement. “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.”

The move further separates BlackRock from PNC’s regulatory oversight, Credit Suisse analysts said in a note following the announcement.