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Barclays loses its CEO, again
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April 13, 1999: 6:13 a.m. ET
U.K. bank chief resigns before reaching desk, merger talk increases
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LONDON (CNNfn) - U.K. bank Barclays lost its second chief executive in six months Tuesday after former BankAmerica CFO Michael O'Neill quit on health grounds.
O'Neill shocked investors by resigning following heart complications after a bout of influenza. The $6 million a year American was due to start on March 26 but never made it to his new desk.
The move weakens Barclays shares at a time when its underlying performance had started to improve, again raising speculation of a merger with another U.K. institution.
"There are upsides and downsides to this," said Mark Thomas, bank analyst at Crédit Lyonnais Securities in London. "Barclays will lack a focused strategy and any replacement [will be seen] as second best."
O'Neill was the unanimous choice of the Barclays board. The bank's shares jumped 8 percent after his appointment.
The 52-year-old O'Neill was recruited to fill the vacuum left by Martin Taylor, who quit as CEO last November after a boardroom rift over the bank's strategy.
Barclays chairman Peter Middleton will again fill the CEO slot until a replacement is found. The bank came under fire for taking four months to find O'Neill and admitting it could find no suitable British candidates.
"Middleton is not particularly liked in the City and it will also delay the appointment of a finance director," said Thomas.
Barclays (BARC) shares fell 2 percent to 1,839 pence Tuesday but Thomas said the merger talk will provide some upside protection. Halifax (HFX) and Abbey National (ANL) are among contenders for a deal with Barclays, according to the analyst.
However, Middleton has made it clear he does not want to negotiate from a position of weakness and, after six months without a permanent CEO, analysts say that is exactly where Barclays sits.
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