Sheikh Mansour Sells 6% Stake In Barclays

The Abu Dhabi sheikh who helped rescue Barclays as part of the British bank’s controversial fundraising during the financial crisis has sold all of his stake.

A regulatory filing last month showed that Sheikh Mansour Bin Zayed Al Nahyan, owner of English soccer club Manchester City, had sold his six per cent stake in the bank, but the filing went largely unnoticed.

The stake was worth about 2.4 billion pounds ($3.7 billion) at current market prices.

The holding was always difficult to track, as it was held by a number of vehicles, including PCP Gulf Invest 3, Nexus Capital Investing and Abu Dhabi International United Investments. All of them are ultimately owned by Sheikh Mansour.

The filing said PCP3 sold 758.4 million shares by June 20. Mansour had used complex hedging transactions, and may have been reducing his stake over the last several years while maintaining the voting rights, and the regulatory filing may have marked the expiration of those hedging arrangements.

Barclays declined to comment and Mansour and his companies could not immediately be reached.

Barclays’ last annual report said Sheikh Mansour indirectly owned 783.5 million shares – or 6.1 per cent of the shares in issue – as of March 4. That included 758.4 million shares held by PCP3 and 25.1 million cash-settled options on shares held by Yas Capital Limited, owned by Mansour.

Abu Dhabi invested alongside Qatar in October 2008, as Barclays fought to avoid a state bailout. The bank successfully raised more than 7 billion pounds, but faced criticism the terms it offered the Middle East investors was too attractive.

Mansour and Qatar appear to have made billions of dollars from the bet, as Barclays shares have climbed from around 179 pence at the time of the deal to 320 pence now.

Mansour bought 2 billion pounds of notes that converted into shares at 153 pence each and received 1.5 billion pounds of warrants on ordinary shares that could be exercised at 198p. He also bought 1.5 billion pounds of instruments that paid 14 per cent annual interest and was paid 110 million pounds in fees.

He exercised and sold the warrants in 2010, while keeping most of his shares in the bank.

Barclays is being investigated by Britain’s Serious Fraud Office and the financial regulator for the payments made to Qatar as part of the 2008 fundraising.