Last updated: July 18, 2008 8:41 am

Qatar now Barclays’ biggest shareholder

The Qatar Investment Authority has become Barclays’ largest investor after less than a fifth of the bank’s existing shareholders participated in its £4.5bn capital-raising issue.

Barclays said on Friday that 19 per cent of existing shareholders had taken up their rights in the ‘claw-back’ issue. The bank had conditionally pre-placed shares with around 20 institutional investors as well the QIA and Challenger, a Qatari fund.

The China Development Bank and Singapore’s Temasek, both existing shareholders, were also part of the underwriting group.

The pre-placed shares were then offered to existing shareholders to allow them to retain their proportional shareholdings in Barclays. However, 81 per cent opted not to exercise this right, and their shareholdings will now be diluted.

The offer was priced at 282p a share, which was a 9 per cent discount to the existing share price at the time of the announcement.

Although shares in Barclays rallied this week as the deadline for the offer approached, they dropped below the offer price last week. Recent weakness in the price of the shares is likely to have affected the enthusiasm of existing shareholders to participate in the capital raising.

Shares in Barclays opened 2.8 per cent lower at 282.6p amid general weakness in UK financial stocks.

Barclays said the extent of the dilution of existing shareholders had not yet been quantified, but further details would be released next week. It confirmed that the QIA would become the single biggest shareholder, with about 6 per cent. Other investors that participated in the pre-placement included Japan’s Sumitomo Mitsui Financial Group, which now owns 2.1 per cent. Challenger, an investment vehicle controlled by the family of the Qatari prime minister, would own a little under 2 per cent.

China Development Bank retains its roughly 3 per cent of Barclays, while Temasek has raised its interest from 2 per cent to between 2.5 and 3 per cent.

The new shares will start trading from Tuesday, and the listing of the new American Depository Receipts on the New York Stock Exchange is expected the same day.

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