Barclays wakes up to find a bull called Bramson in the shop

Get ready for some sport at Barclays. Edward Bramson, an activist investor out of New York with a taste for barging into boardrooms and metaphorically smashing up the crockery, has unveiled a 5% stake in the bank.

Previous UK targets have included F&C Asset Management, Electra Private Equity and 3i, so Barclays represents a major step-up in ambition. It’s one thing to make a splash in the lower leagues of London financial firms, but another to try to call the shots at a highly regulated high street lender.

But that is not a reason to think Bramson will divert from his usual practice of making specific strategic demands and never taking a backwards step. Jes Staley, Barclays’ £4m-a-year chief executive (yes, despite a share price that has gone roughly nowhere on his watch) may find Bramson to be a major irritation. His new activist shareholder is richer than him and has never been accused of being excessively charming.

What does Bramson want? A higher share price, obviously. How does he think it should be achieved? His Sherborne fund is in its usual non-communicative mode at this early stage, so it’s impossible to know. But the investment bank could be on the radar. The division consumes two-thirds of Barclays’ capital but has produced sub-par returns for years.

Demerge it? Sell it? Give it less capital? All those ideas would put Bramson on a collision course with a Staley regime that is committed to investment banking and thinks its strategy will come good within two years. The Staley philosophy says you can’t be half-hearted. His predecessor, Anthony Jenkins, tried running a pared-down investment bank and the experiment was deemed a flop.

Bramson’s view could be fascinating. Does he, for example, think Barclays is better at generating bonuses for its top bankers than it is at making money for the shareholders? If so, bring on the debate – Staley’s “trust me” approach on investment banking has had a ridiculously easy ride so far.

Optimistic, but out of focus

Micro Focus’s share price hit £22 on the day in September 2016 that the UK’s largest quoted technology company unveiled its bold $8.8bn (£6.3bn) purchase of Hewlett Packard’s unwanted software division, including parts of the old Autonomy business. Now the shares are £10.11, down by almost a half on Monday as executive chairman Kevin Loosemore was obliged to concede that a deal that trebled Micro Focus’s size was a huge mistake.

Actually, Loosemore did no such thing. Instead, Micro Focus argued that the “fundamental thesis” of the Hewlett Packard Enterprise (HPE) acquisition “remains intact”. It is merely “operational issues” that have led to a “disappointing” short-term performance, including a miss on revenues that were supposedly fine in January.

Top marks for optimism. But, come on, when the list of things that have gone wrong is so long, the distinction between a bad deal and bad execution is semantic. Micro Focus cited: “issues” with integrating the two IT systems, under-powered sales teams, poor cash collection and general disruption in separating HPE.

One could shrug and say upsets happen in the world of cutting-edge technology. But that’s not Micro Focus’s market. The company operates in the dull, and supposedly lower-risk, field of rewiring legacy software systems with the minimum of fuss. But after only six months – the HSE deal completed in September last year – it has parted company with Chris Hsu, the chief executive who arrived with the new business.

The plunge in the share price removed almost £4bn from Micro Focus’s stock market value. The reaction was severe, but so is the credibility deficit at a company that had previously prospered on a diet of much smaller acquisitions. Micro Focus shelled out $2.5bn in cash and doubled the number of shares in issue to the HPE deal. If you bet the farm, have a bullet-proof plan for integration.

Why it helps to be nice to your shareholders

It’s a bit rich for David Tyler, chairman of Hammerson, to grumble that a £4.9bn bid approach from French shopping centre group Klépierre is “opportunistic”. Tyler and Hammerson created the opportunity themselves by negotiating an all-share deal their own shareholders clearly hate – the planned £3bn merger with smaller UK rival Intu.

Hammerson’s shares had fallen 18% since announcement of the Intu deal, which is in effect a doubling down on exposure to UK shopping centres, an asset class deeply out of fashion in the age of internet shopping. Klépierre’s initial pitch – a 615p offer only half in cash – is probably too low to succeed. But the French have given Hammerson’s board a clue on how to proceed: listen to your shareholders.