The credit crisis seems to have been good to BlackRock Inc. (NYSE:BLK). The New York-based investment manager will announce second-quarter earnings before Tuesday market open with analysts expecting earnings to come in at $1.58 per share. It's likely BlackRock will have no problems meeting those numbers. As for the near future, the company is expected to pick up even more market share in managing assets that was once owned by Bear Stearns Cos. and American International Group Inc. (NYSE:AIG).
The Wall Street Journal reports BlackRock will register $42 million in the first year for running three vehicles holding mortgage-related securities and other investments, according to agreements recently posted on the Federal Reserve Bank of New York's Web site. Additionally, BlackRock will be paid a one-time advisory, analytics and structuring fees of $13.5 million, according to the agreements, the Journal also reports.
On the M&A front, BlackRock bought Barclays Global Investors for 37.8 million shares of common stock as well as $6.6 billion in cash on June 11. The deal is expected to close around the first quarter of 2010. For BlackRock, its stock has become a strong currency for deals, since its shares have risen $48.99, or 36.52%, since Jan. 1 and now are hovering at the $183.00 range.
"I could certainly say from my behalf, and I think for my board, we are not contemplating anything beyond this," BlackRock's CEO Larry Fink said on a conference call to discuss the BGI acquisition in June. When an analyst asked whether the firm would undertake additional deals, he added, "We are not doing any more transactions for the time being."
Some view that statement with skepticism, especially since BlackRock reportedly had considered bids for other asset managers while it pursued the Barclays deal. The firm was reportedly interested in the money market assets of Bank of America Corp.'s (NYSE:BAC) Columbia Management, according to The Deal Pipeline's Auction Block database (subscription required). - Gerald Magpily
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