Barclays shares fell 14 per cent after one of its Middle Eastern investors, IPIC, sold its entire shareholding in the bank for a reported £1.46billion profit.
In a move which took the City by surprise, IPIC, the investment vehicle of Sheikh Mansour bin Zayed al-Nahyan, of the Abu Dhabi royal family, sold 1.3 billion shares
to 220 investors in the UK, US and Europe at 265p a share yesterday, causing Barclays shares to close down 42.75p at 273.5p.
Less than seven months ago, the Sheik made a £2billion investment in Barclays, part of a total £6billion of funding from the Gulf, when the bank was struggling to raise capital and avoid accepting help from the Government.
The deal angered existing shareholders last year, who had not been offered the opportunity to participate in the share issue on the same terms.
IPIC continues to hold warrants for Barclays which can be transferred into a further 758 million Barclays shares at a price of almost 198p per share.
John Varley, chief executive of Barclays, said of the sale: "In the period since IPIC and the government of Abu Dhabi took a position in Barclays in 2008 through their purchase of MCNs and RCIs we have been able to broaden our strategic and commercial relationship, and we look forward to developing this further going forward."
Investors were not expecting the move, which has become one of the biggest placings of stock carried out in the London market. One City analyst told The Financial Times
that he and his colleagues were "stunned" by the sale.
"IPIC has a high regard for Barclays, and great confidence in its management team and ongoing strategy," said H.E. Khadem Al Qubaisi, IPIC managing director.
"The Emirate of Abu Dhabi intends to maintain a close commercial and strategic relationship with Barclays in the future. The decision to dispose of some of its interests in Barclays reflects the focus of IPIC’s long-term investment strategy on hydrocarbon-related opportunities."
© Fair Investment