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Sherborne slides as Bramson says Barclays talks continue

8 August 2018

Activist Edward Bramson brushes off reports his backers are impatient with the lack of detail on his campaign against Barclays bank. Shares in his Sherborne investment company fall 4%.

Activist Edward Bramson has brushed off reports that his backers are becoming impatient with a lack of detail on his engagement with Barclays bank.

Half-year results from Sherborne Investors (Guernsey) C (SIGC) today broke the silence since Bramson’s investment company announced a 5.16% position in Barclays in March but added little new information on Bramson’s strategy. Its shares dropped 4p or 4.4% to 86p.

The company stated: ‘The investment manager [Bramson] has advised the board that it is engaging with Barclays concerning the issues of, inter alia, capital allocation, quality of earnings, capital adequacy, cost structure, and the search process for and mandate of a new chairman. 

‘The investment manager believes that addressing these matters could improve Barclays' financial strength and its long-term competitive position, leading to an increase in shareholder value in line with the investment manager's customary return objectives. 

‘The investment manager’s present intention is to continue its dialogue with Barclays for as long as it appears to be appropriate to do so,’ it added.

SIGC lifted its position in Barclays to 5.41% in April. In its results it noted that Barclays shares had achieved a positive return for most of the first half of the year while it was building its stake and done better than other bank stocks. 

However, after its first quarter results on 26 April Barclays shares had fallen 11% to 189p reducing SIGC shareholders’ net asset value to £607.3 million, or 86.76p per share at 30 June, down from £695.9 million or 99.41p at the end of last year. It said the position had not materially changed since then.

Last month fund manager Richard Buxton dismissed Bramson’s reported interest in scaling back Barclays’ investment bank as ‘bizarre’ and ill-timed given it seemed to be past the worst.

Barclays shares are up 1p or 0.5% to 190p today. The bank’s first quarter results in April were mixed with improved performance from its investment bank marred by a fall in its core capital ratio to 12.7% and a statutory pre-tax loss of £236 million reflecting fines and legal costs in relation to past misconduct.

Chairman John McFarlane has indicated he would like to step down next year, having joined the bank in 2015.

Barclays is the biggest company targeted by Bramson who has previously scored successes by taking control of Electra Private Equity (ELTA) and F&C Asset Management.

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