BofA plans to reduce its stake in BlackRock

Bank of America plans to sell more than half its stake in BlackRock Inc., the companies said Wednesday, putting an end to months of speculation about how the bank would begin to reduce its big investment in the world’s largest asset manager.

Under the share sale, BlackRock plans to sell some 42 million shares, allowing Bank of America and PNC Financial Services Group to reduce their stakes in the New York firm.

BlackRock shares fell as much as 5.1% on Wednesday as analysts said it could be somewhat cumbersome for the company to push so many shares into the market. But many also felt it would also be a long-term positive for the firm because it clarified the banks’ intentions.

Tighter bank capital regulations have long been expected to force the banks to shed their ownership stakes in BlackRock.

Shares of BlackRock, which oversees about $3.4 trillion in client assets, have lagged the rest of the asset management industry this year, amid concerns that share sales would be a drag.

As part of the offering, Bank of America will unload 34.5 million shares, reducing its stake in BlackRock to as little as 12.6% from 33.9%, according to an offering document.

PNC Financial will offer up to 7.5 million shares, BlackRock said, reducing PNC’s ownership of BlackRock to 20.3% from 24.3%. PNC has been a longtime BlackRock shareholder.

Bank of America, based in Charlotte, N.C., in the past has declined to comment on what it planned to do with its big stake in BlackRock, which it acquired with its purchase of investment bank Merrill Lynch & Co in 2008. Merrill had gained the stake by merging its asset management business with BlackRock in 2006.

Bank of America spokesman Jerry Dubrowski said the transaction was consistent with the bank’s strategy to sell “non-core assets” to focus on traditional lending businesses. In the last year, the bank has sold roughly $10 billion in assets, including its stakes in South American and Latin American banks.

BlackRock shares closed down 4.3% at $165.66. Bank of America shares rose 1% to $11.52, and PNC Financial shares rose 2.2% to $54.06.