"Bob is up to something": Is Barclays hot for UBS or Lehman Brothers?

Could be, according to the Daily Telegraph.  CEO Bob Diamond reportedly has ambitions to acquire an investment banking firm, and as part of a possible rights offering designed to shore up its capital base, the company is thinking of raising more to fund an acquisition. Culturally, we don't think that either Lehman or UBS would work....

Barclays is considering making a daring takeover bid for a rival as part of a move to raise capital from shareholders.

There has been intense speculation about whether Barclays will follow Royal Bank of Scotland, HBOS and Bradford & Bingley to raise capital to bolster its balance sheet but the bank itself has remained enigmatic. Chris Lucas, Barclays' finance director, told analysts last week that "all options are open".

Guiding Barclays' decision is understood to be a consideration about whether to try to take advantage of rivals' weakness by launching a large rights issue with a double purpose: to improve its capital ratio and to fund an acquisition.

In the past few weeks Mr Diamond is thought to have looked at both America's Lehman Brothers, which has traded as low as 60pc of its book value, and UBS, whose shares have also plummeted following its £18bn of write-downs. One senior banking source said: "Bob is up to something."

Another said that after Mr Diamond, an American, missed out on the top jobs at Citigroup and Merrill Lynch he wants to go on the offensive with an aggressive expansion of Barclays Capital.

UBS would bring Barclays an equities business and its wealth management and private banking arms, which it would dearly like to acquire, sources said. But UBS is still seen as being in the throes of a crisis and Barclays' shareholders may fear the Swiss giant may have to disclose further bad debts.

Lehman would add to Barclays Capital's existing stronghold in the debt market - which could mean bloody job cuts - but would massively bolster its presence in the US. A Lehman deal is becoming increasingly difficult, sources pointed out, because there are signs that the US market is improving, raising the price of acquisitions there.

Barclays considers daring takeover bid in the US or UK - Daily Telegraph