Barclays shares slip after major backer Qatar cuts stake

LONDON (Reuters) -Barclays shares fell on Tuesday after one of the bank’s largest shareholders Qatar Holding moved to sell around 510 million pounds ($644 million) of stock, cutting back on its crisis-era investment in the bank.

Shares were sold at 141 pence at around 2120 GMT on Monday, a source close to the matter told Reuters, implying a 1.4% discount to Barclays’ closing share price on Monday.

The stake on offer equalled about 2.4% of the bank’s outstanding shares, based on an earlier deal term sheet.

Barclays declined to comment. Qatar Investment Authority, the state sovereign wealth fund which owns Qatar Holding, did not respond to a request for comment.

The share sale comes as Barclays embarks on a shake-up to cut costs and revive its share price, which has halved since Qatar first invested in 2008. It owned nearly 7% of Barclays in 2012.

Barclays’ stock fell as much as 4.5% in morning trading on Tuesday and was last down 2.4% at 1247 GMT.

Investors are parsing what the Qatari move means for Barclays CEO C. S. Venkatakrishnan and his executive team, just weeks before they are expected to unveil a new strategy to restore the bank’s flagging fortunes.

One institutional shareholder in Barclays told Reuters that the timing looked odd ahead of the bank’s strategy update in February, but also said that investors often trade for reasons not necessarily related to the underlying performance of the stock in question.

Qatar became Barclays’ largest shareholder during the 2008 financial crisis when it injected 4 billion pounds into the UK bank in a deal that helped avert a taxpayer bailout. Britain’s financial watchdog later fined Barclays $55 million for fees paid to Qatari entities in the 2008 fundraising, which Barclays said it would appeal.

Under CEO Vekatakrishnan, Barclays this year began working on plans to save as much as 1 billion pounds, which could involve cutting as many as 2,000 jobs, mainly in its back office, Reuters reported last month.

It is also selling its consumer finance unit in Germany and considering selling a stake in its domestic merchant services business, Reuters previously reported.

Barclays has also expressed interest in acquiring Tesco’s banking business.

($1 = 0.7925 pounds)

(Reporting by Iain Withers, Sinead Cruise, Pablo Mayo Cerqueiro and Lawrence White in London, Danilo Masoni in Milan and Andrew Mills in Doha; Editing by Kirsten Donovan, Emelia Sithole-Matarise and Jane Merriman)