Barclays share price: Bank strikes back as activist investor pushes for board seat

Barclays (LON:BARC) has hit back at activist investor Edward Bramson, warning that his appointment to its board of directors would destabilise the bank, the Financial Times has reported. The move comes after Bramson, whose investment vehicle Sherborne holds a 5.5-percent stake in the FTSE 100 group, stepped up his efforts to secure a board seat, warning in a letter to investors earlier this week that there was ‘a real threat’ that the lender will have to raise fresh capital unless it scales back its trading operations.

Barclays’ share price rose in the previous session, gaining 1.58 percent to 163.68p, outperforming the broader UK market, with the benchmark FTSE 100 index ending Thursday’s trading 0.05 percent lower at 7,417.95 points. The group’s shares have given up more than 23 percent of their value over the past year, as compared with about a two-percent gain in the Footsie.

Barclays strikes back

The FT reported yesterday that Barclays had responded to Bramson’s letter, conceding that its investment banking unit, which is unpopular with some investors, was still underperforming, while insisting that the activist investor’s election was  “not what Barclays needs right now”.

“He also does not possess the banking experience and skills that we are seeking to add to the board,” the lender pointed out, adding that the stake which Bramson had amassed through his Sherborne Investors vehicle was ‘leveraged’ and ‘time limited,’ meaning he was not aligned with other shareholders.

Analysts on lender

Jefferies reaffirmed Barclays as a ‘buy’ this week, without specifying a price target on the shares, while JPMorgan Chase & Co, which also rates the lender as a ‘buy,’ set a valuation of 220p on the stock. According to MarketBeat, the blue-chip company currently has a consensus ‘buy’ rating and an average price target of 219.40p.