CVC to buy iShares

CVC Capital Partners has entered exclusive negotiations with Barclays to purchase the derivatives investment business from the bank's subsidiary iShares, in a deal reportedly worth around £3bn.

iShares' securities business will not be included in the deal. CVC saw off rival bids from rival private equity groups such as Apax Partners, Bain Capital, Colony Capital and Hellman & Friedman to secure the purchase.

The deal, which equates to 10x the business's EBITDA, will be financed in part by Barclays, which is thought to be providing a debt package worth two thirds of the total purchase price. The bank will also gain warrants representing 20% of the equity if certain performance milestones are hit.

iShares deals in exchange-traded funds which are tradable like stocks. The firm had £226bn under management at the end of 2008.

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