Barclays may backtrack on a deal to sell its iShares unit to CVC, the private equity group, and instead offload its entire asset management division.

The bank is in talks to sell Barclays Global Investors (BGI), which owns the iShares fund management operation, to bidders believed to include BlackRock, for an estimated £6.5 billion. Shares in Barclays rose by 8.3 per cent to 274p in early trading.

CVC has submitted a binding £3 billion bid for iShares, but under the terms of the deal, Barclays is entitled to a so-called go-shop period in which it has 45 days in which to find a bidder who would offer more.

The go-shop window does not expire until June 18 and sources close to the process admitted that one of the options open to the bank was to sell the entire BGI arm.

Barclays declined to comment. BlackRock did not return calls.

Under CVC’s agreement, the private equity group must be allowed the chance to match any rival offer. If Barclays sells iShares or BGI to another bidder, it would have to pay CVC a break fee of £175 million.

“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.

Time pressure may have been a reason for Barclays to insist on building a go-shop clause into the deal with CVC as it was keen to show that it could boost its capital base without support from the UK Government.

While other high street banks have accepted government money to help them through the credit crunch, including Royal Bank of Scotland and Lloyds TSB Group, Barclays has chosen to raise finance privately. Last year, the bank raised £7 billion from investors in the Middle East.

Stress tests in the UK have since shown that the bank did not need fresh capital, but the sale of BGI would bolster its balance sheet even further.

Any estimates of what BGI or iShares alone are worth can only have gone up given that Barclays shares have roughly doubled since it announced the deal, giving it bigger clout in the talks.

Barclays is providing vendor financing to CVC, offering to finance £ 2.1 billion, or 70 per cent of the deal value, and such financing could encourage more interest.

Barclays is selling the iShares business because it needs the money, not because of any problems, analysts say.

Shares in the group closed up 8.9 per cent at 15.90p.

Acquiring BGI would give BlackRock a larger footprint in the exchange-traded funds business. BGI is one of the largest money managers operating in 15 countries and managing more than £1,000 billion of assets.

Barclays will not require fully funded firm offers until the end of the go-shop period.

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