Today, Barclays announced an update to its £7.3 billion capital raising effort from existing and new strategic and institutional investors, which was announced last month. A number of Barclays existing institutional investors were sharply critical of management for pursuing a private capital-raising plan that is arguably more expensive than funding under the U.K. government’s bank recapitalization plan and on terms that do not allow existing investors to participate on the same terms. Institutional investors threatened to mount a campaign to vote down the capital-raising plan at an extraordinary general meeting of shareholders scheduled for later in November, and various corporate governance advisors were proposing that shareholders reject the proposal
After several meetings with its major institutional shareholders, Barclays decided to hold “discussions with Qatar Holding LLC and entities representing the beneficial interests of HH Sheikh Mansour Bin Zayed Al Nahyan (“the Investors”) who agreed … [last month] … to invest substantial funds into Barclays” under its capital raising scheme. The Investors “have each offered to make available up to £250m of Reserve Capital Instruments for clawback by existing Barclays institutional investors at par. By consequence £500m of Reserve Capital Instruments (excluding Warrants) will today be made available to Barclays institutional investors by way of a bookbuild placing [(a form of reverse auction)].”
Though there were no other changes to Barclays’ capital raising, the board further announced:
- All members of the Board will offer themselves for re-election at the Barclays annual general meeting to be held in April 2009; and
- No annual bonuses will be paid to executive directors of Barclays PLC for 2008.
Barclays' decision not to pay bonuses this year follows announcements by UBS and Goldman Sachs Group that top executives have decided to forgo their 2008 bonuses.