After Barclays turned down government money and chose instead to raise new capital by appealing to Middle Eastern investors, it’s own shareholders staged a mini-revolt. The new preferred shares, called “reserve capital instruments,” are extremely pricey for Barclays, carring a 14% dividend and very dilutive of current shareholders. Barclays needed approval of 75 per cent of shareholders, and it was never certain they would get it.
This morning they did. Here’s Reuters:
Barclays Plc investors have voted in favour of the British bank’s controversial 7 billion pound ($10.44 billion) fundraising, its chairman Marcus Agius said on Monday.
Addressing shareholders at a meeting in London called to vote on the plan, Agius said a count of proxy votes had indicated that the capital-raising would be passed. A final tally of votes will be released later, he said.
Barclays had been expected to get the 75 per cent approval it needed for the plan to go ahead. However, there is likely to be a high number of abstentions in protest, analysts and fund managers have said.
Investors have been angered that they have not been given first refusal on new capital — known as pre-emption rights and that Qatar and Abu Dhabi investors are getting more attractive terms than existing shareholders.
Top five investor Legal & General last week said it would vote in favour even though it does not like the structure of the controversial deal, as rejection of the deal would lead to a material deterioration in shareholder value.
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