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Barclays rebuffs Bramson bid for boardroom seat

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Barclays (LSE: BARC.L - news) has rejected an attempt by Edward Bramson, the activist investor, to gain a seat on the board of Britain's third-biggest bank, paving the way for an escalation in hostilities between them in 2019.

Sky News has learnt that Mr Bramson raised the idea of Barclays granting Sherborne Investors a board seat several weeks ago, but was told that the lender regarded the move as being inappropriate.

Sources said the request had been made on an informal basis during discussions that Mr Bramson held with members of Barclays' board, including Jes Staley, the chief executive.

It was unclear on Friday when Barclays communicated its decision to Mr Bramson.

If the request had been made more formally, it would have had to be disclosed to the stock market, suggesting that the activist shareholder is continuing to test the water nine months after he appeared on Barclays' share register with a shareholding of more than 5%.

Mr Bramson, who has frequently turned to proxy battles to gain seats on the boards of companies in which he holds stakes, has been arguing that Barclays should prune its capital-hungry investment bank and hand more capital back to shareholders.

In an interview with Bloomberg News this week, John McFarlane, Barclays' chairman, said that while its dialogue with Mr Bramson had been "very civil", he had not proposed meaningful ideas that the board wished to pursue.

The request for a board seat was made at a time of continuing upheaval for the bank, which is to replace Mr McFarlane with Nigel Higgins, a veteran Rothschild banker, next spring.

Shortly after taking over, Mr McFarlane pledged to oversee a doubling of the bank's share price‎, having recruited the former JPMorgan (LSE: JPIU.L - news) executive Jes Staley as its new chief executive.

At the time, the shares stood at about 260p, but since then they have nearly halved, trading on Friday at just 147p, giving Barclays a market value of just £25bn.

The retreat in its shares has partly been the result of poor sentiment towards large European bank stocks, and partly because of the myriad legacy issues that Barclays has had to contend with.

Nevertheless, the bank has made vital progress in casting aside some of those millstones this year.

Last spring, the bank reached a $2bn settlement with the US Department of Justice for mis-selling mortgage-backed securities before the financial crisis.

It also saw Mr Staley escape comparatively unscathed from a regulatory probe into his attempts to unmask a whistleblower, an offence which many in the City had felt could lead to his dismissal.

At its annual results, Barclays said it ‎would hike its dividend for 2018, and pledged to return surplus capital more rapidly to investors.

The debate over Barclays' presence in investment banking has raged for decades, with former CEO Bob Diamond's success at building it into a global player never translating into industry-leading returns on capital.

Barclays and a spokesman for Sherborne both declined to comment.

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