British bank Barclays has decided to offload its $6.1-billion (4.7-billion-euro) stake in US-based asset management company BlackRock Inc., it said on Monday.
"Barclays Bank PLC announces that it intends to undertake a disposal of its entire holding in BlackRock, Inc. by way of a registered offering and a related buyback by BlackRock," it said in an official statement.
The lender added that BlackRock has agreed to repurchase $1.0 billion worth of its 19.6-percent holding. The remainder of the stake will then be listed.
The news comes one month after Barclays revealed that it plunged into losses in the first quarter of this year on the back of a huge accounting charge and vast compensation claims for mis-selling insurance policies.
The BlackRock announcement helped send Barclays' share price higher in late afternoon London deals on Monday, according to some analysts.
Shares rallied 2.21 percent to 1.80 pence on London's FTSE index of top companies, which closed 0.7 percent higher.
"The BlackRock stake had little fit with the rest of the Barclays franchise and offered little in terms of profitability," analysts at Citi wrote in a research note to clients.
"We see no logic in retaining the stake and therefore think this decision is the correct one."
Other analysts cautioned that Barclays shares were rebounding on the back of recent losses that were rooted in fears over the long-running eurozone sovereign debt crisis.
"Barclays shares have been punished hard in recent weeks amidst concern over the eurozone," said Mike McCudden, head of derivatives at online brokerage Interactive investor.
"We are seeing a bit of a pull back today as ... traders assess the situation with a clearer mindset, but any suggestion that Barclays is finding meaningful support off this disposal would seem slightly far-fetched."
The pricing of the listing is meanwhile expected to be completed later this week, according to a person familiar with the matter, who added that the sale should get underway soon afterwards.
A bank spokesman meanwhile declined to comment on what the sale funds would be used for.
However, analysts speculated that the disposal was aimed at meeting tough Basel III regulations that will force lenders to hold a bigger capital buffer to prevent a repeat of the 2008-2009 global financial crisis.
"The (Barclays) shares were due a bit of a bounce after the declines of recent days," added CMC Markets analyst Michael Hewson.
"I think the share price rebound is reflective of that and less about the BlackRock disposal, which appears to be necessary as part of Basel III regulations.
He added: "Upside in bank shares is likely to remain limited while Europe's problems remain ... especially given that Barclays does have some exposure to Portugal and Spain."
Barclays suffered a net loss of £337 million in the three months to March, compared with a profit of £1.24 billion in the first quarter of 2011.
Late last month, meanwhile, Barclays revealed that almost one third of its shareholders had chosen not to back its annual executive pay awards amid controversy over chief executive Bob Diamond's huge wage package.
- Dow Jones Newswires contributed to this report - text he