Barclays shareholders pull back from the brink
It has been reported that Legal and General, a major shareholder in Barclays, has pulled back from fighting the recent Middle East fundraising. There had been concerns that the vote would be tight and the deal could possibly have been scuppered at the last minute but these have now disappeared. Leading shareholders have now decided to back off after a number of concessions were offered by the Barclays board.
The recent announcement by the government that any rescue packages negotiated in the future would be on less favourable terms than those in the past was also something which seems to have been foremost in the minds of investors. They are not happy that the 13% interest rate afforded to the Middle East fundraising is well out of sync with the government's offer but the extra capital is vital for the success of the group in the future are no more risks can be taken.
This will be a relief to the Barclays board although we could see some repercussions in the future when certain key directors are up for re-election. We seem to be entering a phase of shareholder power with the management of many of the U.K.'s largest banking companies forced to go cap in hand to shareholders for extra finance.
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