Slim demand for Barclays offer gives Qatar 8% stake

By Steve Slater

LONDON (Reuters) - Qatari and Asian investors will provide the bulk of Barclays' 4.5 billion pound fundraising after the British bank said on Friday less than a fifth of its existing shareholders signed up to buy shares.

Qatari investors -- who have taken an 8 percent stake -- made a quick paper profit of 200 million pounds ($400 million) on their holding after a surge by bank stocks. But the sector rally came too late for HBOS, whose underwriters are set to be left with most of a 4 billion pound rights issue.

Barclays, Britain's third-biggest bank, said last month it had raised funds from major investors in Qatar, Japan, China, Singapore and elsewhere and it would give existing shareholders the chance to buy on the same terms.

That allowed them to buy shares at 282 pence each -- a 9 percent discount at the time of the offer -- to prevent their stake being diluted.

Barclays said shareholders signed up to buy 267 million new shares, or 19 percent of those offered, which analysts said was within expectations after the shares dipped below 282p in the days before the deadline, reducing the incentive to buy.

The remaining 1.14 billion shares will be taken by the previously announced "anchor" investors -- rather than leave the market to soak up unwanted stock.

"It was a very well structured and intelligent way of raising capital, it avoided the pitfalls that have been associated with rights issues," said Mamoun Tazi, analyst at MF Global. "Barclays gave the opportunity to existing shareholders and filled the void with new investors."

The structure also allowed Barclays to raise funds quicker than rivals such as HBOS, which unveiled its cash call two months before Barclays but only closed the offer on Friday.

HBOS's underwriters -- Morgan Stanley and Dresdner -- may each be left with over 1 billion pounds of shares to sell in the market after the stock remained below the rights offer price before the deadline to sign up.

By 10:00 a.m. EDT Barclays shares were up 8 percent at 314p, as European banks were boosted by a smaller-than-expected loss by U.S. bank Citigroup. Barclays shares traded as low as 238.75p earlier in the week.

QATAR, HEDGE FUNDS BUY

Banks across the world have been trying to raise money to boost their balance sheets which have been hit by writedowns on risky assets due to the lock down in credit markets.

Qatar's sovereign wealth fund paid 1.4 billion pounds for a 6.2 percent stake in Barclays and a member of Qatar's ruling family spent 432 million pounds on a 1.9 percent stake, based on each anchor investor getting 81 percent of their allocation.

Other investors to back the offer were state-owned China Development Bank, Singapore's Temasek and Japanese bank Sumitomo Mitsui. CDB has kept its Barclays stake at around 3 percent, Temasek will own 2.5 percent to 3 percent, and SMFG will own about 2 percent.

Overseas investors will now own over 40 percent of Barclays' shares, up from about a third before the cash call.