Vote your proxy today!
| Earlier this year BlackRock announced plans to
combine with another highly regarded asset manager—Merrill Lynch Investment Managers
(MLIM). This transaction is expected to be completed at the end of the third quarter of
2006, subject to various regulatory and shareholder approvals and customary closing
conditions. |
| BlackRock and Merrill Lynch Investment Managers
possess complementary capabilities that will create an organization uniting some of the
finest money managers in the industry. After the transaction is complete, the new firm,
which will be called BlackRock, will be one of the top-10 investment managers worldwide,
entrusted with over $1 trillion in assets under management (based on combined assets
under management as of March 31, 2006). |
Upcoming changes at BlackRock require that mutual
fund shareholders vote their proxies |
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| Mail |
Phone |
Internet |
In Person |
June 15, 2006
Dear Shareholder:
You are cordially invited to attend
a special shareholder meeting (the “Special Meeting”) of BlackRock Large Cap Growth
Equity Portfolio (the “BlackRock Fund”), a portfolio of BlackRock FundsSM (“BlackRock
Funds”), to be held on Tuesday, August 22, 2006. Before the Special Meeting, I would like
to provide you with additional background and ask for your vote on an important proposal
affecting the BlackRock Fund.
The proposal you will be asked to
consider at the meeting, as described in the enclosed Combined Prospectus/Proxy
Statement, is the proposed reorganization (the “Reorganization”) of the BlackRock Fund
into Merrill Lynch Large Cap Growth Fund (the “ML Fund”), a series of Merrill Lynch Large
Cap Series Funds, Inc., a fund with an investment objective and investment policies
similar to those of the BlackRock Fund. As you know, the BlackRock Fund is advised by
BlackRock Advisors, Inc., a subsidiary of BlackRock, Inc. (“BlackRock”). When the
transaction between Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock (as
discussed below) is completed, the ML Fund will be managed by BlackRock Advisors, Inc. or
its successor (“BlackRock Advisors”) and it is expected to be renamed BlackRock Large Cap
Growth Fund. It is a condition to the closing of the Reorganization that the transaction
between MLIM and BlackRock shall have been completed. MLIM, BlackRock or their affiliates
will pay all expenses of completing the Reorganization, including proxy solicitation
costs. As a result, the shareholders of the BlackRock Fund will not bear the costs of the
Reorganization.
The proposal you will be asked to
consider at the meeting arises from the agreement by Merrill Lynch & Co., Inc. (“Merrill
Lynch”), to combine MLIM and certain affiliates with BlackRock, one of the largest
publicly traded investment management firms in the United States, to form a new asset
management company that will be one of the world’s preeminent, diversified global money
management organizations with approximately $1 trillion in assets under management. Based
in New York, BlackRock currently manages assets for institutional and individual
investors worldwide through a variety of equity, fixed income, cash management and
alternative investment products. The new company will operate under the BlackRock name
and be governed by a board of directors with a majority of independent members. The new
company will offer a full range of equity, fixed income, cash management and alternative
investment products with strong representation in both retail and institutional channels,
in the United States and in non-U.S. markets. It will have over 4,500 employees in 18
countries and a major presence in most key markets, including the United States, the
United Kingdom, Asia, Australia, the Middle East and Europe. The transaction has been
approved by the boards of directors of Merrill Lynch, BlackRock and The PNC Financial
Services Group, Inc., BlackRock’s current majority shareholder, and is expected to close
at the end of the third quarter of 2006.
This proposed Reorganization is part
of the effort to consolidate certain of the comparable MLIM and BlackRock mutual funds to
eliminate redundancies and achieve certain operating efficiencies.
The Board of Trustees of BlackRock
Funds believes the Reorganization is in the best interests of the BlackRock Fund and its
shareholders, and unanimously recommends that you vote “For” the proposed Reorganization.
I encourage you to carefully review
the enclosed materials, which explain this proposal in more detail. As a shareholder,
your vote is important, and we hope that you will respond today to ensure that your
shares will be represented at the Special Meeting. You may vote using one of the methods
below by following the instructions on your proxy card:
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By
touch-tone telephone; |
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By
returning the enclosed proxy card in the postage-paid envelope; or |
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In
person at the Special Meeting. |
If you do not vote using one of
these methods, you may be called by Computershare Fund Services, our proxy solicitor, to
vote your shares over the phone.
As always, we appreciate your
support.
| |
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Sincerely,
David
R. Wilmerding, Jr.
Trustee and Chairman of the Board |
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| Please
vote now. Your vote is important. |
| |
| To avoid the wasteful and unnecessary expense of
further solicitation, we urge you to promptly indicate your
voting instructions on the
enclosed proxy card, date and sign it and return it in the envelope provided, or record your voting instructions
by telephone or via the
internet, no matter how large or small your holdings may be. If you submit a properly executed proxy but do not
indicate how you wish your
shares to be voted, your shares will be voted “For” the Reorganization. If your shares are held through a broker,
you must provide voting
instructions to your broker about how to vote your shares in order for your broker to vote your shares at the
Special Meeting. |
|
Questions and Answers
We recommend that you
read the complete Combined Prospectus/Proxy Statement. For your convenience, we have
provided a brief overview of the issue to be voted on.
| Q: |
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Why
is a shareholder meeting being held? |
| A: |
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You
are being asked to approve an agreement and plan of reorganization (the “Reorganization”)
between BlackRock Large Cap Growth Equity Portfolio (the “BlackRock Fund”), a
portfolio of BlackRock FundsSM (“BlackRock Funds”), and the Merrill Lynch Large Cap Growth Fund (the “ML Fund”), a series of Merrill Lynch Large Cap
Series Funds, Inc., a fund that pursues an investment objective and investment policies similar
to that of the BlackRock Fund. If the proposed Reorganization is approved and completed,
an account at the ML Fund will be set up in your name, you will become a shareholder of
the ML Fund and the BlackRock Fund will be terminated as a series of BlackRock Funds.
Please refer to the Combined Prospectus/Proxy Statement for a detailed explanation of the
proposed Reorganization and for a more complete description of the ML Fund. |
| |
The
Reorganization arises from the agreement by Merrill Lynch & Co., Inc. (“Merrill Lynch”),
to combine Merrill Lynch Investment Managers, L.P. (“MLIM”) and certain affiliates, with
BlackRock, Inc. (“BlackRock”), one of the largest publicly traded investment management
firms in the United States, to form a new asset management company that will be one of
the world’s preeminent, diversified global money management organizations with
approximately $1 trillion in assets under management. The Reorganization is part of a
larger initiative to consolidate certain of the comparable MLIM and BlackRock mutual
funds to eliminate redundancies and achieve certain operating efficiencies. As you know,
the BlackRock Fund is advised by BlackRock Advisors, Inc., a subsidiary of BlackRock.
When the transaction between MLIM and BlackRock is completed, the ML Fund will be managed
by BlackRock Advisors, Inc. or its successor (“BlackRock Advisors”), and it is expected
to be renamed BlackRock Large Cap Growth Fund. MLIM, BlackRock or their
affiliates will pay all expenses of completing the Reorganization, including proxy
solicitation costs. As a result, the shareholders of the BlackRock Fund will not bear the
costs of the Reorganization. It is a condition to the closing of the Reorganization that
the transaction between MLIM and BlackRock shall have been completed. |
| |
BlackRock
is one of the largest publicly traded investment management firms in the United States
with approximately $463 billion in assets under management as of March 31, 2006. Based in
New York, BlackRock currently manages assets for institutional and individual investors
worldwide through a variety of equity, fixed income, cash management and alternative
investment products. The new company will operate under the BlackRock name and be
governed by a board of directors with a majority of independent members. The new company
will offer a full range of equity, fixed income, cash management and alternative
investment products with strong representation in both retail and institutional channels,
in the United States and in non-U.S. markets. It will have over 4,500 employees in 18
countries and a major presence in most key markets, including the United States, the
United Kingdom, Asia, Australia, the Middle East and Europe. The transaction has been
approved by the boards of directors of Merrill Lynch, BlackRock and The PNC Financial
Services Group, Inc., BlackRock’s current majority shareholder, and is expected to close
at the end of the third quarter of 2006. |
| Q: |
|
How
does the Board of Trustees suggest that I vote? |
| A: |
|
After
careful consideration, the Board of Trustees of BlackRock Funds (the “BlackRock Fund Board”)
has determined that the proposed Reorganization will benefit the shareholders of the
BlackRock Fund and recommends that you cast your vote “For” the proposed Reorganization.
|
| Q: |
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How
will the Reorganization affect me? |
| A: |
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If
shareholders of the BlackRock Fund approve the proposed Reorganization, substantially all
of the assets and certain stated liabilities of the BlackRock Fund will be combined with
those of the ML Fund, and you will become a shareholder of the ML Fund. An account will be
set up in your name at the ML Fund and you will receive the same or a similar class of
shares of the ML Fund as you currently hold of the BlackRock Fund. The aggregate net
asset value of the shares you receive in the Reorganization will equal the aggregate net
asset value of the shares you own immediately prior to the Reorganization. As a result of
the Reorganization, however, a shareholder of the BlackRock Fund will hold a smaller
percentage of ownership in the combined fund than he or she held in the BlackRock Fund
prior to the Reorganization. |
| Q: |
|
In
the Reorganization, will I receive shares of the ML Fund of the same class as the shares
of the BlackRock Fund that I now hold? |
| A: |
|
You
will receive shares of the ML Fund of the same or a similar class as the shares you own
of the BlackRock Fund. |
| Q: |
|
Will
I own the same number of shares of the ML Fund as I currently own of the BlackRock Fund? |
| A: |
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No,
you will receive shares of the ML Fund with the same aggregate net asset value as the
shares of the BlackRock Fund you own prior to the Reorganization. However, the number of
shares you receive will depend on the relative net asset value of the shares of the two
Funds on the closing date. Thus, on the closing date, if the net asset value of a share
of the ML Fund is lower than the net asset value of the corresponding share of the
BlackRock Fund, you will receive a greater number of shares of the ML Fund in the
Reorganization than you held in the BlackRock Fund before the Reorganization. On the
other hand, if the net asset value of a share of the ML Fund is higher than the net asset
value of the corresponding share of the BlackRock Fund, you will receive fewer shares of
the ML Fund in the Reorganization than you held in the BlackRock Fund before the
Reorganization. The aggregate net asset value of your ML Fund shares immediately after
the Reorganization will be the same as the aggregate net asset value of your BlackRock
Fund shares immediately prior to the Reorganization. |
| Q: |
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Will
my privileges as a shareholder change after the Reorganization? |
| A: |
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Your
rights as a shareholder will not change in any substantial way as a result of the
Reorganization. In addition, the shareholder services available to you after the
Reorganization will be substantially the same or may become more favorable. |
| Q: |
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Who
will advise the ML Fund once the Reorganization is completed? |
| A: |
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The
ML Fund will be managed by BlackRock Advisors, a wholly-owned subsidiary of BlackRock,
pursuant to an investment advisory agreement to be entered into following the completion
of the transaction between MLIM and BlackRock. |
| Q: |
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Will
I have to pay any sales load, commission or other similar fee in connection with the
Reorganization? |
| A: |
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No,
you will not pay any sales load, commission or other similar fee in connection with the
Reorganization. As more fully discussed in the Combined Prospectus/Proxy Statement, the
holding period with respect to any contingent deferred sales charge that applies to
shares of the ML Fund acquired by you in the Reorganization will be measured from the
earlier of the time (i) you purchased your BlackRock Fund shares or (ii) you purchased
your shares of any other BlackRock fund and subsequently exchanged them for shares of the
BlackRock Fund. |
| Q: |
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How
do operating expenses paid by the ML Fund compare to those payable by the BlackRock Fund? |
| A: |
|
The projected net operating expenses of each class of
shares of the combined fund are expected to be
greater than those of the BlackRock Fund prior to the
Reorganization. Based on several factors as described
in the accompanying Combined Prospectus/Proxy
Statement (including, among other things, the
investment policies of each Fund, the composition of
the investment team that will manage the combined
fund, the relatively small size of the BlackRock Fund
compared to the ML Fund and the superior
performance history of the ML Fund over time
compared to the BlackRock Fund), BlackRock Funds’
Trustees have approved the proposed Reorganization
believing it will benefit shareholders of the BlackRock
Fund and they recommend that you cast your vote
“For” the proposed Reorganization notwithstanding the
expected increase in net operating expenses. |
| Q: |
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What
will I have to do to open an account in the ML Fund? What happens to my account if the
Reorganization is approved? |
| A: |
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If
the Reorganization is approved, an account will be set up in your name and your shares
automatically will be converted into shares of the ML Fund, and we will send you written
confirmation that this change has taken place. You will receive the same or a similar
class of shares of the ML Fund as you currently hold of the BlackRock Fund. The aggregate
net asset value of the shares you receive in the Reorganization will be equal to the
aggregate net asset value of the shares you own immediately prior to the Reorganization.
No certificates for shares will be issued in connection with the Reorganization. If you
currently hold certificates representing your shares of the BlackRock Fund, it is not
necessary to surrender such certificates. |
| Q: |
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Will
I have to pay any federal taxes as a result of the Reorganization? |
| A: |
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The
Reorganization is expected to qualify as a tax-free “reorganization” within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the Reorganization
so qualifies, in general, the BlackRock Fund will not recognize any gain or loss as a
result of the transfer of substantially all of its assets and certain stated liabilities
in exchange solely for shares of the ML Fund or as a result of its liquidation, and you
will not recognize any gain or loss upon your receipt solely of shares of the ML Fund in
connection with the Reorganization. |
| Q: |
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What
if I redeem or exchange my shares before the Reorganization takes place? |
| A: |
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If
you choose to redeem or exchange your shares before the Reorganization takes place, the
redemption or exchange will be treated as a normal redemption or exchange of shares and,
generally, will be a taxable transaction and any applicable redemption fees will be
applied. Also, in the case of redemptions, any
applicable contingent deferred sales charges fees will be applied. |
| Q: |
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How
do I vote my proxy? |
| A: |
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You
may cast your vote by mail, telephone or internet or in person at the special shareholder
meeting. To vote by mail, please mark your vote on the enclosed proxy card and sign, date
and return the card in the postage-paid envelope provided. To vote by telephone or over
the internet, please have the proxy card in hand and call the telephone number or go to
the website address listed on the proxy card and follow the instructions. |
| Q: |
|
When
will the Reorganization occur? |
| A: |
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If
approved by shareholders, the Reorganization is expected to occur contemporaneously with
or soon after the transaction between MLIM and BlackRock, which is expected to occur at
the end of the third quarter of 2006. The Reorganization will not take place if for any
reason the transaction between MLIM and BlackRock does not occur or if the Reorganization
is not approved by BlackRock Fund shareholders at the Special Meeting. |
| Q: |
|
Whom
do I contact for further information? |
| A: |
|
You
can contact your financial adviser for further information. You may also call
Computershare Fund Services, our proxy solicitor, at 1-866-390-5114 or visit our website
at www.blackrock.com where you can send us an e-mail message by selecting “Contact Us.” |
| |
Important
additional information about the proposal is set forth in the accompanying Combined
Prospectus/Proxy Statement. Please read it carefully. |
|
If you need any assistance, or have any
questions regarding the proposals or how to
vote your shares, please call 1-866-390-5114.
Please don’t delay! It is important that you
vote today. Your prompt response will avoid
additional mailings.
|
BlackRock FundsSM
100 Bellevue Parkway, Wilmington,
Delaware 19809 • (800) 441-7762
FORWARD LOOKING STATEMENTS
This communication, and other
statements that BlackRock may make, including statements about the benefits of the
transaction with Merrill Lynch, may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act, with respect to BlackRock’s future
financial or business performance, strategies or expectations. Forward-looking statements
are typically identified by words or phrases such as “trend,” “potential,”
“opportunity,” “pipeline,” “believe,” “comfortable,”
“expect,” “anticipate,” “current,” “intention,”
“estimate,” “position,” “assume,” “outlook,” “continue,”
“remain,” “maintain,” “sustain,” “seek,” “achieve,” and
similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or
similar expressions. BlackRock cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time. Forward-looking
statements speak only as of the date they are made, and BlackRock assumes no duty to and
does not undertake to update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and future results could
differ materially from historical performance. In addition to factors previously
disclosed in BlackRock’s Securities and Exchange Commission (SEC) reports and those
identified elsewhere in this communication, the following factors, among others, could
cause actual results to differ materially from forward-looking statements or historical
performance: (1) the ability of BlackRock to complete the transaction with Merrill Lynch;
(2) BlackRock’s ability to successfully integrate the MLIM business with its existing
business; (3) the ability of BlackRock to effectively manage the former MLIM assets along
with its historical assets under management; (4) the relative and absolute investment
performance of BlackRock’s investment products, including its separately-managed accounts
and the former MLIM business; and (5) BlackRock’s success in maintaining distribution of
its products. BlackRock’s Annual Reports on Form 10-K and BlackRock’s subsequent reports
filed with the SEC, accessible on the SEC’s website at http://www.sec.gov and on BlackRock’s
website at http://www.blackrock.com, discuss these factors in more detail and identify
additional factors that can affect forward-looking statements. The information contained
on our website is not a part of this press release.
ADDITIONAL INFORMATION AND WHERE TO
FIND IT
In connection with the proposed
transactions, a registration statement of New BlackRock, Inc. (Registration No.
333-134916), which includes a preliminary proxy statement of BlackRock, and other
materials have been filed with the SEC and are publicly available. The proxy
statement/prospectus will be mailed to the stockholders of BlackRock. STOCKHOLDERS OF
BLACKROCK ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES
AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Such proxy statement/prospectus
(when available) and other relevant documents may also be obtained, free of charge, on
the Securities and Exchange Commission’s website (http://www.sec.gov) or by contacting
our Secretary, BlackRock, Inc., 40 East 52nd Street, New York, New York 10022.
PARTICIPANTS IN THE SOLICITATION
BlackRock and certain persons may be
deemed to be participants in the solicitation of proxies relating to the proposed
transactions. The participants in such solicitation may include BlackRock’s executive
officers and directors. Further information regarding persons who may be deemed
participants is available in the proxy statement/prospectus filed with the Securities and
Exchange Commission in connection with the transactions.