On the weekend before PNC’s May announcement, bankers drove from their out-of-town homes to New York City offices, phoned investors and completed the landmark offering mostly virtually, the people said.
Fink Factor
In most transactions of this kind, the CEO of the company whose stock is being sold is not heavily involved. It was different with Fink, who helped build BlackRock into today’s money management behemoth and arguably knows many of the funds better than the bankers on the deal. He personally made calls to some of the major investors that ended up participating in the transaction, the people said.
The pitch was simple enough: it was an opportunity for investors to buy shares in the world’s largest asset manager at a discount. The shares were sold at $420 apiece, a discount of almost 15% on BlackRock’s closing price prior to the deal launch. All this got done during the coronavirus pandemic, which has seen BlackRock become a key resource for implementing the U.S. central bank’s bond-buying program.
Eight strategic investors accounted for 80% of the orders when PNC put its stake on the block, Fink said on May 14. “It was a testimony of our relationships with these large strategic investors,” he said.
PNC received orders for at least two times the amount of shares that were available, illustrating the stiff competition to secure a piece of the sale, the people said. In the days following the transaction, those investors that bought in saw BlackRock’s stock rally, offering big paper gains.
The banks were also winners. The roster of about 20 banks on the deal earned fees totaling up to $160 million, a helpful boost to their business amid the tepid initial public offering market. Morgan Stanley, Citigroup and Evercore will receive more than half of the fee pool, the people familiar with the matter said.
This article was provided by Bloomberg News.