Qataris to sell £1.4bn stake in Barclays

Shares in Barclays fell by as much as 5 per cent on Tuesday after it emerged that the Qatar Holding, a subsidiary of the Qatar Investment Authority and a leading shareholder, had sold £1.4bn worth of shares in the UK bank.

The fund is selling 379m warrants in Barclays that will be converted at a price of 197.7p each, a 48 per cent discount to last night’s closing price. The warrant conversion will net Barclays £750m and improve the bank’s core tier one equity ratio by 18 basis points to about 8.98 per cent.

The sale will result in proceeds of between £600m and £650m for the Qatari fund and will take place via an accelerated book-build managed by Crédit Suisse.

The Qataris are the second Middle Eastern fund to cash out of Barclays this year, after a fund connected to the Abu Dhabi royal family sold a large stake in June, making a £1.46bn($2.42bn) profit on a £2bn investment.

Barclays shares were trading down 4.5 per cent or 17.05p at 365p in late morning trading on Tuesday. They have risen more than seven-fold since hitting a low just above 50p in the first quarter of this year.

“The rally in the banking sector since the beginning of March hasn’t had any significant pull-back, and I would guess this sale shows that the Qataris would rather jump off the train too early than too late,” said David Morrison, market analyst at GFT.

“Given the severity of the crisis, and the fact that the underlying causes remain unresolved, the drivers of the banking rally are the co-ordinated stimuli packages and exceptionally low rates. While this situation may persist for a while longer, it has to end sometime.”