Barclays shareholders have now voted in favour of the proposed capital raising. Shareholders voted 87.19% For and 12.81% Against the proposal. In total, 22% of shareholders either voted against the proposal or withheld their vote.

Although most shareholders at the extraordinary general meeting were angry with the disregard for pre-emption rights of existing shareholders and the high cost of the capital raising, they believed that they had no option but to agree to the transaction.

On the same day as Barclays shareholders voted on the capital raising, Standard Chartered Bank announced that is was undertaking a rights issue. The capital raising fully respects pre-emption rights. In this transaction, Standard Chartered’s principal investor, Temasek with a 19% holding, has agreed to take up its rights and has also underwritten an additional 14% of the issue. J P Morgan, UBS and Goldman Sachs have underwritten the remainder of the issue.  Whilst Standard Chartered had not been directed by the FSA to raise additional capital, it believes that even with capital ratios above required levels, it is a prudent move to do so.

If the Barclay’s Board had not resisted significant capital raising earlier in the year, it too could have respected pre-emption rights and achieved a much cheaper deal. InvestorVoice agrees with one of our guest’s comments, “Having seen how they manage and raise capital it is difficult to see any corporate asking Barclays for capital raising advice.”

Barclay’s shareholders should continue to let the Board know of their displeasure and be prepared to demand boardroom changes.

Barclays - 724,760 personal shareholders must write to the Board

Following the excuses for its planned expensive capital raising and meagre attempts to avoid further institutional investor anger, Barclays still ignores its personal shareholders.

At the end of 2007, Barclays stated there were 724,760 personal shareholders who owned approximately 7% of the Group. In the last 12 months, these shareholders have seen the total value of their investment fall by £1.7 billion. It is these individuals, who are unable to participate in the rights issue, which the Barclays’ Board cares little about.

The UK’s institutional investors and shareholder advisory groups have been loud and clear in voicing their displeasure at the disregard for the pre-emption rights of current shareholders and the expensive raising of £7.0 billion of additional capital.

In an attempt to appease the institutions, Barclays has clawed back £500m of the Reserve Capital Instruments from the Middle Eastern investors’ proposed deal and placed it with institutions. However, these institutions will not receive any of the commissions nor potentially extremely valuable warrants that the Middle Eastern investors will receive. Personal shareholders and other non-institutional investors will not be able to participate in this offering.

 In addition, the executive directors of Barclays have graciously waived their right to any bonus for 2008. Over the last 2 years, the five executive directors received an average of £ 6 million in base salary, benefits and bonus plus many multiples of this figure under the five different share and option schemes. However, with the share price at its lowest for 13 years, it is difficult to see how they could have expected a bonus for their efforts in 2008.

In a further attempt to placate investors, all of the directors have put themselves up for re-election at the next AGM to be held in April 2009. It would have been more appropriate for the directors to have put themselves up for re-election at the same time they are asking shareholders to vote on the capital raising – next week. We expect that the directors would not have thought that to be a safe option. It maybe safer to wait for the next AGM, when they hope that the two Middle Eastern investors, who could control over 30% of the votes, decide to reward the directors for their generous deal by supporting their re-election.

Personal shareholders will have to decide if they wish to vote for or against the proposed capital raising after fully considering all relevant issues.  However, no matter how they decide to vote, if they have concerns about how they have been treated, they should write to the Barclays’ Board of Directors or email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it to express their views.

 Editor’s note: Should shareholders wish to write to the company but want to remain anonymous they may add their views to the InvestorVoice website in the comments section under the press release at investorvoice.co.uk. 

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