Barclays Chairman Heard No Solutions From Activist Bramson
(Bloomberg) -- Barclays Plc’s John McFarlane said the lender is having a “very good” and “civil” dialogue with activist Edward Bramson, who emerged as one of its largest shareholders this year. But the British bank’s outgoing chairman doesn’t think much of Bramson’s ideas.
Bramson has been stepping up his campaign to shrink the investment bank -- the division at the center of Chief Executive Officer Jes Staley’s growth plan -- by drumming up support among non-executive directors, Bloomberg News reported in November.
Even with the stock near a two-year low, McFarlane is standing his ground.
Bramson “has made some critical points, but at this point he hasn’t come up with a solution -- ‘oh, by the way, you should do this’ -- and therefore the dialogue continues,” McFarlane, 71, said in an interview with BNN Bloomberg television’s Amanda Lang in Toronto. “Some of the things that actually are suggested are just not valid, and the consequence of doing them isn’t what is assumed.”
“We had a very good dialogue with him,” McFarlane said. “It has been very civil, and it has been very analytical.”
With an investment of more than 5 percent in the bank, Bramson has the power to request an annual meeting. He has signaled he has the firepower to increase his stake, Bloomberg reported last month.
Barclays confirmed it retained Goldman Sachs Group Inc. specifically to advise on defense against the activist. It is also tapping JPMorgan Chase & Co. and Deutsche Bank AG for advice, along with its own internal corporate broker team.
Third-quarter results, reported in October, went some way to vindicating McFarlane and Staley’s strategy, with the equity business driving a solid quarter. However, the stock has continued sliding since then, tracking the broader bear market for European banks.
McFarlane said management has been “very diligent” in making sure its response to Bramson is based on an “analysis and fact.”
“One thing we’ve done with his major points -- we had them analyzed internally,” as well as by the external advisers, he said. “If the mission is for us to bring shorter-term returns at the sacrifice of reasonable-probability long-term returns, we’re not going to do it.”
McFarlane will step down in May after four years at the bank, replaced by veteran Rothschild & Co. rainmaker Nigel Higgins.
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