Between Blackrock and a hard place

23 January 2006 By Rob Cox Follow @rob1cox

Does John Mack want to build an empire or create value for shareholders? If he wants the latter, buying Blackrock would be questionable. But a spinoff and merger of Morgan s asset management arm with Blackrock would reap many benefits. He should pursue this option.

This content is for Subscribers only

Context News

Morgan Stanley is in merger discussions with assetmanagement firm Blackrock, according to press reports. The deal could take the shape of an acquisition by Morgan Stanley for as much as $10bn, or a merger of its asset management arm with Blackrock, which would continue to exist as a publicly traded company managed by Larry Fink.

Blackrock, based in New York, has $452bn in assets under management, of which twothirds, $303bn, are fixedincome assets. Equities make up just over 8% of assets, and alternative investments 5.5%.

On Thursday, Blackrock reported fourthquarter and fullyear earnings for 2005. Net income for the fourth quarter increased 19% from the third quarter to $72m, and for the year increased 63% from 2004 to $223m. Pennsylvaniabased PNC owns 70% of Blackrock.

Email a friend

Please complete the form below.

Required fields *