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January 21, 2009

Could the Barclays Center become Her Majesty's Arena?

Here are a couple stories regarding the plight of Barclays, proud holder of the naming rights to the would-be arena at the center of Bruce Ratner's Atlantic Yards project. A major bailout by the Bank of England might be the only thing standing between Barclays and bankruptcy.

FT.com, Barclays remains under pressure

Barclays fell another 9 per cent on Wednesday afternoon as fears about the health of the banking sector following the government’s latest bail-out persisted.

The UK’s second largest bank, which has more than halved in a week, closed 6.8p lower at 66.1p. Earlier in the session the bank’s shares had fallen as low as 47.4p, a fall of 35 per cent, amid speculation it could bring forward its annual results statement. The bank, which turned down the opportunity to participate in the government’s bank rescue earlier this week, is due to release full-year results on February 17.

That 47.4 pence per share, equal to about 65 cents, matches a low not seen since 1985.

Worries about the banks’ potential exposure to further significant writedowns and the creeping threat of nationalisation have put the sector under pressure all week, but other banking stocks managed an afternoon rally on Wednesday.

Bloomberg News, Barclays Falls Seventh Day on Nationalization Concern

Barclays Plc, the U.K. bank that turned down government funding last year, declined for a seventh straight day in London trading on speculation that it may be forced to take more writedowns and be nationalized.

Barclays, which dropped as much 35 percent earlier in the day, recovered to close down 9.3 percent at 66.1 pence. The shares have lost 57 percent this month, valuing the company at 5.5 billion pounds ($7.5 billion).

Barclays last week said it would beat analysts' consensus 2008 earnings estimate of 5.3 billion pounds. Some are skeptical that Barclays could do that when other banks are writing off billions.

“There is genuine fear from shareholders, who see a real risk of nationalization,” said Simon Maughan, an analyst at MF Global Securities Ltd. who has a “sell” rating on Barclays. “The whole rest of the world, operating in the same business as Barclays, has seen significant losses. There is talk that Barclays will bring its results forward to prove its case. Bring it on.”

NoLandGrab: Wonder what the Nets' marketing rep's job will be on "A Day in the Life" of Barclays? Helping tear up the arena naming-rights contract, perhaps?

Posted by eric at January 21, 2009 3:28 PM