US hedge fund Atticus Capital is urging Barclays to drop its €65 billion bid for Dutch bank ABN Amro after buying a significant stake in the British bank.
Atticus said in a letter to Marcus Agius, Barclays chairman, that it was concerned the bank will be issuing shares to buy "an inferior business, in an auction at inflated prices".
The letter was published by the Financial Timesand verified by a source, who said Atticus held an interest in Barclays of about 1 per cent.
Barclays said today that Atticus's views were not representative of feedback from its investors.
But its shares jumped over 3 per cent on the prospect of investor opposition, which could make it harder for the bank to win its battle for control of ABN.
The letter said Barclays would be issuing stock at nine times earnings and paying more than 15 times earnings for ABN.
"It is clear that you are not the best owner for ABN Amro's sprawling collection of assets," the letter said, adding that a rival consortium led by Royal Bank of Scotland offered "significantly higher synergies" and was positioned to outbid Barclays.
Atticus said it was concerned that Barclays would raise its offer and said it would vote against the deal and encourage others to do likewise.