Foreign investors take stakes in Barclays to 16%

Existing shareholders in Britain's third largest bank took up only 19% of new shares in a £4.5bn fundraising

New overseas investors including a Qatari sovereign wealth fund will own a 10% stake in Barclays after existing shareholders in the bank took up only 19% of new shares in a £4.5bn fundraising.

Shares in Britain's third largest bank surged more than 10% to 320.25p, above the 282p price at which it placed shares with investors, as part of a banking sector bounce on Friday.

Barclays said last month that it was raising £4bn from "anchor" investors - the Qatar Investment Authority, the sovereign wealth fund, and Challenger, a vehicle headed by the chairman of Qatar Holding, Sheikh Hamad bin Jassim bin Jabr al-Thani. Barclays gave existing shareholders the chance to buy on the same terms, but most shunned the offer.

That means the QIA will end up with a 6% stake in Barclays while Challenger will hold just below 2%. Including the Japanese bank Sumitomo Mitsui, which has invested £500m in a 2.1% stake, the new overseas investors will own a tenth of Barclays.

"I'm pleased to welcome new shareholders to our register as a result of our capital raising," said Barclays chief executive John Varley. "We look forward to building on our relationship with our new shareholders, QIA and Sumitomo Mitsui, and we appreciate the support of existing owners of our shares including China Development Bank, Temasek and other institutional holders."

It has been almost a year since the credit crunch started. British banks including HBOS, Royal Bank of Scotland and Bradford & Bingley have been scrambling to raise fresh funds to shore up their balance sheets. The result of HBOS's £4bn rights issue will not be known until Monday. It took B&B three attempts to get through a £400m fundraising, which was finally approved at a special shareholders' meeting yesterday.

CDB and Temasek in Singapore - counted among the four "anchor" investors - put in enough cash to maintain their stakes of 3% and 2% - though Temasek's stake is now set to rise to between 2.5% and 3%. This would bring the combined stakes held by overseas investors to 15.5-16%.

Existing shareholders in Barclays were able to buy shares at 282p in a "claw back" from the four big investors. With the bank's share price below 282p for much of this week, many investors decided not to take up their options. Shareholders bought 267m shares for £753m, equivalent to 19% of the shares on offer. The remaining 1.14bn shares were placed with the Qataris, CDB, Temasek and other institutional investors.

Separately, Sumitomo Mitsui paid £500m to buy 169m shares at a higher price of 296p and signed a collaboration agreement with Barclays.


Julia Kollewe

The GuardianTramp

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