You will remember that I said this about the ownership of Circle in a previous post.
QUOTE
Circle Holdings is not the ultimate owner of Circle Health, however, because it is itself owned through a complicated structure with bases in tax havens such as Jersey and the British Virgin Islands. 28.9% of it is owned by a hedge fund company called Lansdowne UK,(domiciled in the Cayman Islands) founded by Tory party donor Paul Ruddock. A further 16.6% is owned by Odey Asset Management and its founder, Crispin Odey, is also a Tory party donor. A company called Balderton Capital III owns 16.9% and the rest is owned by BlueCrest Venture Finance Master Fund (14.9%) and Blackrock (12.9%)
At the time I looked at Odey Asset managment and then I just had a quick look at the others, which all seemed to be fairly straightforward hedge and investment funds.
So I was curious to note this today, in Barclay's accounts to the end of December 2011.
QUOTE
Adjusted profit before tax and adjusted performance measures have been presented to provide a more consistent basis for comparing business performance between periods. These measures exclude: the impact of own credit; gains on debt buy-backs; loss on disposal of a portion of the Group’s strategic investment in BlackRock, Inc.; the impairment of the investment in BlackRock, Inc.;
I wondered if that is the same company. I had a look about and I discovered this:
www.guardian.co.uk/business/2009/ju...rclays-bank-arm.
In 2009 Blackrock sought to buy a subsidiary of Barclay's bank called Barclay's Global Investors (BGI) for $13.5 billion.The deal was to be paid for with $6.6 billion cash and $6.9 billion in shares. In other words Barclays would end up with 20% of Blackrock.
It is really strange how these things are portrayed: it is presented as a purchase
by Blackrock
of a part of Barclays: but Barclays ends up owning a 5th of Blackrock. It is not a bit of wonder that people get confused.
200 of Barclay's employees owed 4.5% of BGI and so they stood to make profit from this deal: Mr Diamond, the Barclay chairman who thinks our heads button up the back, was personally likely to make $20 million dollars on this deal alone.
Now I do not know how they got those shares in the first place. But we do know that senior bankers often get shares in the bank they run as part of their bonuses. It occurs to me to wonder if the shares in BGI were like that: and if so what they were said to be worth when they were paid in the first place. It is reported (see second link, below) that Mr Diamond paid £6 million for shares and options between 2003 and 2009: but that does not exclude the notion they were part of his remuneration package. I do not know.
Blackrock said that the takeover of BGI would mean it was managing combined assets worth £2.7 trillion. That is a very big asset management company.
The next thing I discovered was that in 2011 Blackrock's home page states that it is a very big investment adviser which has assets under management of $3.35 trillion at the end of September 2011. So we are in the same ballpark. Could be the same company. And that is finally confirmed by the fact that iShares is shown as a subsidiary on their welcome page: iShares was part of the 2009 transaction and is mentioned in the article I linked.
Then I found this
http://uk.finance.yahoo.com/news/circle-ho...-114200451.htmlThat is a notification of a change in share ownership and I presume that it is mandatory. It shows that Blackrock UK Absolute Holding Fund has disposed of some shares in Circle Holdings. At the time I was looking at the ownership of Circle Blackrock held 12.9% of Circle: this notification has been triggered because the holding has reduced below 10% (seems to be some kind of threshold system) and it happened on 25th January this year. At the bottom of the notification it shows that the full name of the notifier is Blackrock (NYSE) Inc. So I am pretty confident this is the same company
The deal with Barclays was reported in June 2009. So it was interesting to find that in July of that same year, millions were wiped off the Blackrock share value: and Mr Diamond and his pals lost money on the deal
www.guardian.co.uk/business/2009/ju...P=ILCNETTXT3487It might occur to you to wonder what that did to Mr Diamond and his friends Capital Gain: and therefore to their liability to tax....
It is also curious to note that of the $6 billion dollars in cash to be paid for BGI, Barclays lent Blackrock $2 billion of it. There was a "risk warning" attached to the information to the effect that Blackrock might not be able to pay the interest on that loan. Yet it was said to be on commercial terms. Does your bank lend you money when you tell them you might not be able to make the payments?
This is quite murky but although the barclay's stuff is intersting my main point is that a company which was a substantial stakeholder in Circle is not worth quite so much now and has sold on that interest. It looks as if the purchaser is an arm of our old friends Delta, though I am not sure about that. But the game of musical shares has begun before the ink is even dry on the Hinchingbrooke contract, by the look of it
Edited by FionaK - 13/2/2012, 21:49
