The Barclays Open Share Offer

Barclays is raising approximately £4.5 billion of fresh capital through a placing of new shares with new and existing investors. As part of the placing, current shareholders are being offered the opportunity to buy new shares on the basis of 3 new Barclays shares for every 14 existing Barclays shares held as at 24 June 2008.

There are no rights, hence the shares have no value to the client if they are not taken up.

Your Barclays shares are held in a nominee account. As the nominee, Fidelity is charged with responding on your behalf to corporate actions such as the raising of new capital. In this particular case, we will not take up the offer of new shares.

No, this has been announced by the Barclays Board of Directors.

Under this entitlement offer, only shareholders on the register as at 24 June can participate and entitlements cannot be passed on.

The windfall share ISA is a free service that has no mechanism for adding new shares. In that sense, it differs significantly from a self-select ISA or a stock-broking account, which levy fees. In light of this, Fidelity has decided not to take up the offer on your behalf.

This will depend on the value of Barclays’ shares at the time of the offer. As at 1 July 2008, Barclays shares were trading at 272.75p, below the offer price of 282p. Share prices are subject to many different factors. Fidelity makes no predictions as to the direction of individual share prices.

The windfall share ISA has no mechanism for the addition of such new shares.

No action is required from you. We have sought to post on the Internet as quickly as possible our intended approach to this corporate action. Given the tight timetable of the offer, this is the most practical way of informing affected clients.

We are not making an investment decision for you, we are simply not taking up the offer to buy additional shares

 No compensation is due. If you want to increase your holding in Barclays, you can buy additional shares in the open market.

We cannot predict the outcome of the share offer but the share price is likely to drop as a result of this as the shares are being diluted by the offer.

The ISA section of our retail client terms states that Windfall Shares will be registered in the name of a nominee of Fidelity, which may be a Fidelity Group Company.

If you want to increase your holding in Barclays, you can buy additional shares in the open market.

The shares are registered in the name of a Fidelity nominee company which holds them on your behalf within your ISA. Transferring the shares would not enable you to take up the offer as Fidelity is the named shareholder as at 24 June. You would of course be able to buy additional shares on the open market.

The share offer from Barclays is not the same as the offer from HBOS. HBOS shareholders have the opportunity to sell their rights to the new shares. Barclays is offering no such rights.

There are two main differences between the HBOS rights issue and the Barclays Placing and Open Offer. The principal difference is that the Barclays offer does not include tradeable rights; your entitlement therefore has no monetary value on the stock market and cannot be traded. The second difference is that a rights issue will be underwritten by one or more companies (usually investment banks) and so any remaining shares that are not taken up by existing shareholders will be taken up by the underwriters. Placing and Open offers are not underwritten but have other investors lined up so any shares that are not taken up by the existing shareholders may be taken up by these large corporate investors (in this case Temasek, China Development Bank and Qatar Investment Authority).