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Saturday 07th of November 2009
October 20, 2009    

Barclays shares hit by Qatar sale but Sainsbury’s shares surge

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by Kay Murchie
Barclays shares hit by Qatar sale but Sainsbury’s shares surge

Shares in Barclays lost nearly 5% today after reports suggested that Qatar’s sovereign wealth fund was looking to sell 379 million shares in the bank in order to raise funds to bid for supermarket giant Sainsbury’s.

The news sent Barclays shares down by 18.25p to 363.75p while Sainsbury’s rose 11p to 341.5p.

The shares in the banking giant are worth more than £1.3 billion but the Qataris have declined to comment on the speculation surrounding a bid for Sainsbury’s, which is the UK‘s third largest supermarket.

Barclays is one of the few banks that has not received any financial help from the Government, opting to go it alone last year by raising £7 billion from investors in Qatar and Abu Dhabi.

However, since Barclays shares have rallied as the financial sector recovers from the worst crisis in decades, Qatar is looking to cash in its shares.

The speculation comes just a few months after Abu Dhabi-based International Petroleum Investment Company sold over a billion shares in the bank.

Last Thursday, shares in Sainsbury’s soared after talks that the Qatar Investment Authority (QIA) is planning to increase its stake in the chain.

In November 2007, QIA made a £10.5 billion offer for the company but withdrew the offer at the last minute blaming the credit crunch and at the time said a deal “would not be in the best interests of stakeholders”.

The fund still retains a 26% stake in the UK’s third largest supermarket.

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