Barclays iShares bidder search success

By Douwe Miedema and Victoria Howley

LONDON (Reuters) - Barclays Plc's (BARC.L: Quote, Profile, Research) efforts to find more bidders for its iShares funds arm seem to have paid off, showing that prize assets can draw plenty of interest even in crisis-stricken markets.

Barclays said on Sunday it had received new interest from both trade and private equity buyers for iShares, after a report in the Sunday Times newspaper said buy-out house BC Partners might top a 3 billion pound ($4.56 billion) deal with CVC Capital Partners, agreed in April.

BC Partners had bid 3.5 billion pounds for the unit, the Sunday Times said. If it or anyone else lodges a bid, CVC has first right of refusal to trump it.

In addition, any blow to CVC would be softened because of a $175 million break-up fee, payable if Barclays finds a new buyer.

"If they walk away, they'll (CVC) earn a nice bit of money for a few weeks work," one banker said, asking not to be named, because he was not involved in the sales process.

BC Partners and CVC declined to comment.

Time pressure may have been a reason for Barclays to insist on building in a so-called "go-shop" clause in the deal with CVC -- which allows it to seek a higher offer -- as it was keen to show it could boost its capital base without support from the UK government.

Stress tests in the UK had shown the bank did not need fresh capital, Barclays said on March 27. A few days later it said it was in talks with CVC over iShares.