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 UltraShort Municipal
Portfolio (the “BlackRock Fund”), a portfolio of 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 Short-Term Portfolio (the “ML Fund”), a series of Merrill Lynch Municipal Bond Fund,
Inc. (the “ML Company”), 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”). It is expected that the ML Company will be renamed
BlackRock Municipal Bond Fund, Inc. and that the ML Fund will be renamed BlackRock
Short-Term Municipal 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
investment 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 all 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
UltraShort Municipal Portfolio (the “BlackRock Fund”), a
portfolio of BlackRock FundsSM (“BlackRock Funds”), and
the Short-Term Portfolio (the “ML Fund”), a series of
Merrill Lynch Municipal Bond Fund, Inc. (the “ML
Company”), 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”). It is expected that the ML
Company will be renamed BlackRock Municipal Bond
Fund, Inc. and that the ML Fund will be renamed
BlackRock Short-Term Municipal 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: |
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How does the Board of Trustees suggest that I vote? |
| A: |
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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. The BlackRock Fund Board
considered the similarities between the investment objectives and policies of the ML Fund
and the BlackRock Fund, and anticipates that shareholders of the BlackRock Fund
will benefit from (i) the expected potential benefits from the larger net asset size of the
combined fund, (ii) the combined fund having projected net operating expenses at or below
those of the BlackRock Fund prior to the Reorganization after taking into account
contractual and/or voluntary fee waivers, and (iii) receiving substantially the same level
of services as currently offered in addition to a broader array of investment options offered
by the larger combined fund family. |
| 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 be come a shareholder
of the ML Fund. An account will be set up in your name at the ML Fund and you
will receive shares of the ML Fund. 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: |
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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: |
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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: |
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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 Funds 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: |
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Following the Reorganization, the ML Fund’s projected net operating expenses
are expected to be at or below those of the BlackRock Fund after taking into
account contractual and/or voluntary fee waivers. |
| 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. Also, in the
case of redemption, any applicable contingent deferred sales charges 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: |
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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: |
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Whom do I contact for further information? |
| A: |
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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.