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Add to myFT Activist investor pledges to push for Barclays board seat Edward Bramson loses patience after talks with UK bank and aims to seek vote at AGM Edward Bramson, head of the Sherborne investment vehicle, is due to meet Barclays chief executive Jes Staley on March 12 in New York © Matt Greenslade Save Print this page
The activist investor pushing to shake up Barclays has ratcheted up pressure on the British bank by pledging to seek investor backing for a seat on its board of directors.
Edward Bramson wrote to shareholders in his Sherborne investment vehicle informing them he did “not have confidence” he could engineer a recovery in the bank’s share price in his existing capacity as an outside investor.
Mr Bramson’s attempt to secure shareholder backing for a directorship at Barclays sets the stage for a bitter proxy battle and represents a significant escalation in his campaign against the bank.
If he is successful, it would mark the first time in recent history that an activist has forced their way on to the board of a big UK-listed bank.
“It seems increasingly likely that, for any progress to be made on our concerns, we will be required to seek a shareholder vote to make changes in the composition of the board,” Mr Bramson wrote in the letter, which was sent to his investors last month.
The move comes after the board of Barclays in September rebuffed a call from Sherborne to add Mr Bramson as a non-executive director.
The activist investor — who has successfully shaken up UK companies such as F&C Asset Management — has been pressuring Barclays to wind down parts of its investment banking division, which he says act as a drag on the company’s valuation.
The bank’s shares have lost 23 per cent of their value over the past 12 months.
“The corporate and investment bank (CIB) has been described to us as a ‘black box with too much leverage’ and this deters many long-term investors from acquiring shares even at an exceptionally large discount to tangible book value,” Mr Bramson wrote.
If Barclays were to heed to the pressure and jettison chunks of CIB it would herald the demise of Britain’s last remaining global investment bank at a time of much hand-wringing over the future of the industry across Europe.
In the letter, Mr Bramson said the “most pragmatic approach” for winning a board seat would be for Sherborne to seek shareholder backing for a resolution to be voted on at the Barclays annual meeting in May.
However, he left open the possibility of winning approval via an extraordinary meeting.
Mr Bramson amassed a stake of about 5 per cent in Barclays last year and has since slightly increased his position to 5.5 per cent making him the bank’s biggest single investor. He said he was due to meet Barclays chief executive Jes Staley in New York on March 12.
It is unclear whether he has the required support among other Barclays investors to win a board seat. Earlier this year, the Financial Times reported that he was struggling to convince shareholders that he had the right strategy for the bank.
However, one large investor said that Mr Bramson could prevail in the proxy battle owing to the unusual composition of its investor base, which is dominated by US value funds rather than traditional UK fund managers that have tended to back management in such disputes.
“If there were a proxy vote then people might not vote in the UK long-only investor way — and that gives Sherborne a fighting chance,” the investor said.
One person familiar with Barclays’ strategy said the bank had been expecting Mr Bramson to “get proper active eventually” following months of mostly polite dialogue between the two sides.
However, the person suggested that UK regulators might decline to approve the appointment of Mr Bramson to the board for fear of the tumult that could follow.
In the letter to his investors, which was first reported by Bloomberg, Mr Bramson poured cold water on an apparent turnround at Barclays’ trading division during the past nine months.
Mr Bramson said that higher revenues in the equities and fixed-income units were the result of Barclays undercutting rivals “rather than any change in long-term strategic competitiveness”. Get alerts on Barclays PLC when a new story is published Get alerts Copyright The Financial Times Limited 2019. All rights reserved. Promoted Content