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PNC Financial reported on Monday that it is cashing in it's chips on BlackRock. $PNC turned its $240 million bet on the asset manager into over $17 billion in 25 years. $PNC holds 22% of $BRC’s outstanding shares, and is the largest shareholder.

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PNC holds 22% of BlackRock’s outstanding shares, making it the largest holder in the entity.

 

PNC Financial Services Group Inc NYSE: PNC  Reported Exiting BlackRock, Inc. NYSE: BLK

 

The move comes 25 years after PNC bought BlackRock from alternative asset manager Blackstone Group Inc. in a $240 million deal. Back than that Steve Schwarzman called the move  “a heroic mistake.” PNC’s stake has in the investment is one of the great trades. A share of BlackRock cost $14 when it debuted in 1999; its shares closed at $493.11 on Monday May 11, 2020 as they announced the exit..

PNC Financial Services Group (NYSE: PNC) NC will exit its investment, which is now worth about $17 billion via a public secondary offering.  In the first tranche of the transaction, BlackRock will buy back $1.1 billion of the shares directly from PNC

 

PNC Financial Services Group Inc NYSE: PNC

Market Reaction After hours $107.40 +$5.28 (+5.17%)

 

BlackRock, Inc. NYSE: BLK

Market Reaction After hours $477.00 −$16.11 (-3.27%)

 

Highlights

  • The deal comes at a time of market turmoil since the Covid-19 economic lockdown shattered the global economy.
  • Since the market meltdown PNC’s stock is down 36% this year.
  • Exiting the BlackRock stake helps improve  up PNC’s balance sheet with improved liquidity

"Now is the right time to “unlock the value of our investment,” PNC Chief Executive Officer William Demchak, who is also on BlackRock’s board, said in a statement. The move enhances PNC’s balance sheet and leaves the firm “very well-positioned to take advantage of potential investment opportunities that history has shown can arise in disrupted markets,” he said.

  • Notably the exit also means further separation of BlackRock from PNC’s regulatory oversight.

 

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