Barclays declares war on New York raider
Bramson branded flawed, disruptive and damaging
BarCLaYS has unleashed a furious broadside against the corporate raider seeking a seat on its board – branding him disruptive, inexperienced and damaging.
In a brutal takedown released last night to the stock market, Barclays said activist investor Edward Bramson did not understand how banks work and could wreak havoc.
Bramson (pictured right) – who controls a 5.51pc stake in the lender through his fund Sherborne Investors – is campaigning for investors to vote him on to the board at Barclays’ annual meeting next month.
He has been critical of the company’s prized investment bank and is thought to favour deep cutbacks.
the outcome of the power struggle could determine the future of one of Britain’s largest banks with 24m UK customers and 30,000 UK staff. Its shares are held in the pension funds and Isas of millions of savers.
Hitting back against Bramson’s proposals, Barclays said:
His criticisms were based on ‘a flawed understanding of complex banking organisations’.
the raider had conducted his campaign in a secretive and confrontational way which should bar him from the board.
He would work against shareholders’ long-term interests.
Further cuts would be a distraction that could send shares plummeting.
Barclays admitted that its share price – down 25pc in the past year – is lower than hoped, but said that boss Jes Staley’s strategy of boosting the investment bank in the UK and US was starting to bear fruit. It said: ‘another strategic overhaul is not what Barclays needs right now.’
Laying into Bramson it said: ‘He would be a disruptive and uncollaborative influence on the board. He also does not possess the banking experience and skills that we are seeking.’
the comments were a response to a letter sent by Sherborne to investors earlier this week.
In it, Bramson compared Barclays to ailing German lender Deutsche Bank and said its unprofitable investment arm is holding it back.
Barclays said his analysis was ‘both unclear and based on multiple factual errors’. the bank also criticised the way Bramson has behaved during his year-long campaign, saying he has been secretive and unwilling to engage.
Barclays said the 68-year-old has refused to set out detailed plans during meetings with the board – telling incoming chairman nigel Higgins that he was not prepared to share any views with him.
the bank dismissed Bramson’s plan for cuts as no more than ‘a vague concept’.
It said: ‘He fails to provide any details of what that might entail.
‘the presence on the board of Mr Bramson, or any other person that conducts himself or herself in this manner, would have a negative impact.’ Bramson was also criticised for holding his stake through a complicated system which includes some short-sold shares – meaning he would make money on these if the lender’s share price falls.
this arrangement – designed to protect Bramson’s investment from a drop in the stock’s value – makes Sherborne different from other investors, who will only make money if the shares go up.
the bank is widely expected to fend off Bramson’s bid for a board seat, but chairman John McFarlane, who bows out at next month’s annual meeting, said: ‘Shareholders need to appreciate how damaging this could be.’