Private equity firm CVC Capital Partners is buying iShares asset management business from Barclays for 3 billion pounds ($4.4 billion) in a deal that will be 70 percent funded by the British bank.

Barclays said on Thursday it expects to achieve a net gain on the deal of 1.5 billion pounds, which will add about 54 basis points to its equity tier 1 capital ratio, lifting it to 7.2 percent.

Barclays will provide 2.1 billion pounds of the financing for the deal. It is also entitled to receive 20 percent of the equity return from iShares once CVC has achieved certain minimum returns.

By 1320 GMT Barclays shares were up 12.6 percent at 177.8 pence, the top performing UK stock, helped by confirmation of the deal.

The British bank said last week it was in talks with CVC to sell iShares, which is the leading exchange traded funds provider offering products that mimic the performance of an index. The deal was expected to be worth about 3 billion pounds, a person familiar with the matter told Reuters.

The UK bank has also been given a go-shop clause, where it can seek to get a better offer for iShares from elsewhere until June 18.

Barclays said the remainder of the funding for the deal will be provided by CVC. The bank has agreed to hold at least 51 percent of the financing for the deal for the first five years.

CVC, founded in 1981 and headquartered in Luxembourg, closed an 11 billion euro ($14.6 billion) fund at the start of this year, and had about 16 billion euros available including money available from previous funds.

($1=.7530 Euro)

(Reporting by Steve Slater; Editing by Hans Peters)

United kingdom Investment Barclays