London-based Barclays is seeking to address longstanding concern that its Tier 1 capital cushion is too thin to shield it from potential credit market-related troubles. By eschewing a regular rights issue, in which shares are offered to existing investors with the shortfall taken up by banks, it is hoping to stem further share price declines after losing more than half its market value in the past year.
The size of the share sale is slightly higher than the £4.0 billion predicted last week and the 9.3% discount of the main tranche of the issue is at the top of expectations. Nevertheless, Barclays shares were up 13.75 pence, or 4.4%, at 324.50 pence by midmorning Wednesday on relief that the bank is addressing its need for new capital.
The main part of the issue will be open to existing shareholders to sidestep the need for shareholder approval and pre-empt accusations they are being sidelined. -
Laura BoardFor complete details of the share sale, see full story on
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