In a significant move reflecting changing investment strategies, Qatar Holding is set to divest approximately 510 million pounds ($643.72 million) worth of shares in Barclays (BARC.L), as confirmed by one of the banks involved in the transaction on Monday. This divestiture marks a notable reduction in Qatar Holding’s crisis-era investment in the British bank.
The deal is poised to be finalized at 141 pence per share, representing a discount of about 1.4% to Barclays’ closing share price on Monday. The decision to sell shares comes at a pivotal time for Barclays, which is currently undergoing efforts to rejuvenate its share price. The bank’s shares have experienced a 50% decrease since Qatar’s initial investment in 2008.
Under the leadership of CEO C. S. Venkatakrishnan, Barclays is exploring strategic initiatives aimed at steering the bank towards a positive trajectory. The share sale by Qatar Holding underscores the commitment to reassess and optimize its investment portfolio.
Qatar became Barclays’ largest shareholder during the 2008 financial crisis when it injected a substantial 4 billion pounds into the British bank. This injection, though controversial, played a crucial role in averting a taxpayer bailout. Qatar has previously capitalized on warrants acquired through the capital injection, showcasing its dynamic approach to investment.
Barclays, in its quest for financial resilience, has been actively working on plans to save up to 1 billion pounds. These plans may involve significant workforce reduction, with the potential elimination of up to 2,000 jobs, primarily in the back-office functions.
In addition to workforce restructuring, Barclays is divesting its consumer finance unit in Germany and considering the sale of a stake in its domestic merchant services business, aligning with broader efforts to streamline operations.
Furthermore, Barclays has expressed interest in acquiring Tesco’s banking business, signaling its intent to explore growth opportunities amid the evolving financial landscape.
As Qatar Holding proceeds with the share sale, the financial markets will be closely watching Barclays’ response and the impact on its ongoing revitalization efforts. The transaction serves as a pivotal moment in the relationship between Qatar Holding and Barclays, reflecting the dynamic nature of global financial markets and the strategic decisions made by major institutional investors.
(Source: Reuters | Financial Times | Bloomberg)
