One of the Middle East investors who pumped billions of pounds into Barclays has effectively sold a chunk of shares in the bank, sending its shares lower.
Abu Dhabi's exercised £131.6m warrants in the bank, equivalent to a 1.1 per cent stake, and simultaneously entered into a complex hedging arrangement with Nomura, it said in a statement after Thursday's close.
Nomura simultaneously executed a market placing of 220m shares, the statement said.
By 8:43 a.m. Barclays shares were down 2.4 per cent at 296.75 pence.
"Abu Dhabi still have upside exposure in the stock, but they're taking some money off the table," said Manoj Ladwa, senior trader at ETX Capital.
Abu Dhabi committed to pump up to £4.75bn into Barclays two years ago as part of a controversial fundraising that allowed Barclays to avoid taking taxpayer funds, but was criticised for being too generous to the Middle East investors.
It sold instruments equivalent to an 11 per cent stake in the bank in June 2009, making $2.5bn (£1.6bn) from the investment, but still held a stake.
City A.M. Reporter