Jones Lang LaSalle


BlackRock shares tumble on breakdown in talks

by Catherine Tymkiw February 01, 2006
Shares of BlackRock Inc. tumbled more than 7% after CNBC said that talks with Morgan Stanley about a potential takeover broke down.

Shares of BlackRock Inc. tumbled more than 7% on Wednesday after financial news network CNBC said that talks with Morgan Stanley about a potential takeover by the investment firm broke down. BlackRock’s stock fell as much as 7.4%, to $123, during early trading and was off 3.5% intraday. Less than two weeks ago, the firm’s stock surged nearly 10% after CNBC initially reported the negotiations with Morgan Stanley. It all came down to price. According to CNBC, Morgan Stanley Chief Executive John Mack nixed the deal because it was too expensive -- estimates ranged from $8 billion to $10 billion.

BlackRock’s stock has skyrocketed from $14 in 1999, when it was taken public by Pittsburgh, Pa.-based PNC Financial Group Inc. BlackRock, which has a market capitalization of $8.3 billion, managed $452.7 billion of assets at the end of last year. Although takeover talks have cooled for now, a deal could still happen if valuations of asset-management firms reach "a more reasonable level," reported CNBC citing unnamed Morgan Stanley sources.