Barclays pockets £750m windfall in second Qatari shares sell-off

Sovereign wealth fund may be preparing for another tilt at Sainsbury's

Speculation that Qatar's sovereign wealth fund is preparing another tilt at Sainsbury's was rising again yesterday after it sold down its stake in Barclays.

The Qatar Investment Authority was issued with warrants at the height of the financial crisis that allowed it to buy 380 million new Barclays shares at 198p. Yesterday it cashed them in, making a profit of £613m after Credit Suisse oversaw a sale to institutions. As a result of the warrants' conversion, Barclays will net £750m, which will go towards strengthening its balance sheet.

The Qataris have refused to comment on their interest in the supermarket chain, run by Justin King. They tore up a proposed 600p a share £10.2bn bid in November 2007 as a result of the financial crisis. City rumours, however, suggest that they may be prepared to come back with an offer of about 420p a share or nearly £8bn for the chain. The QIA currently owns 26 per cent of the grocer.

Sainsbury's recently reported robust sales, although it warned that growth could be constrained in the coming months. Yesterday, the shares surged, gaining 16.9p to close at 347p.

The investment in Barclays by the Qataris and other Middle Eastern investors allowed the bank to avoid being bailed out by the Government.

While the terms were criticised at the time, the deal has allowed Barclays to concentrate on building its investment banking division, through the purchase of the US arm of Lehman Brothers, and make high-profile hires at a time when the part state-owned banks, such as Royal Bank of Scotland, have been under close scrutiny over the pay packages offered to bankers. In total, Barclays raised has £7bn from Middle Eastern investors.

Despite the warrant sale, the QIA insisted in a statement to the Stock Exchange that it remained a supportive long-term investor in Barclays.

Ahmad al-Sayed, the CEO and managing director of the QIA, said: "The decision to exercise the warrants and dispose of the resultant shares forms part of Qatar Holding's portfolio management programme and does not impact on our current intention to remain a long-term strategic shareholder in Barclays."

John Varley, the bank's chief executive, added: "We are happy to be working with Qatar Holding on a placing derived from the exercise of some 50 per cent of its warrants. The effect will be further to broaden the base of our share register. Qatar Holding is our largest shareholder and a key partner of the Barclays Group."

Despite the statements of support Barclays' shares fell 17.55p to 364.5p.