Some of Barclays’ biggest shareholders are threatening to vote against the bank’s £7.3 billion fundraising that includes a preferential placing to investors in the Gulf.

Legal & General Investment Management and Aviva Investors are said to be concerned about the high dilution of existing investors and the cost of the funding.

Barclays avoided tapping the UK Government for emergency capital last month by embarking on its own fundraising, in which Abu Dhabi and Qatar investors could end up owning about a third of the bank.

However, L&G, which owns more than 5 per cent of Barclays, and Aviva, which holds 1 per cent, are threatening a revolt at an extraordinary meeting on November 24 to approve the deal unless the terms are improved, according to the Financial Times. On Friday the issue will be fleshed out when members of the Association of British Insurers, which represent a fifth of all UK investors, meet senior Barclays management.

Knight Vinke, the activist American investor, has also been gauging whether there was sufficient unrest among shareholders to justify a public revolt.

Under the terms of the Barclays deal, Sheikh Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi Royal Family, will inject up to £3.5 billion in Barclays for a stake of up to 16.3 per cent. The Qatar Investment Authority (QIA) will increase its stake from 6.2 per cent to 12.7 per cent at a cost of up to £2 billion. The Qatari Prime Minister, Sheikh Hamad bin Jassim bin Jabr al-Thani, will pay £300 million to increase his holding to up to 2.8 per cent.

However, some long-term Barclays investors are livid at the way that the deal was structured. Barclays will issue £3 billion of tax-deductible securities that pay a coupon of 14 per cent for ten years as well as warrants that will give Sheikh Mansour and the QIA the right to buy the bank’s shares for 198p.

Institutional investors have complained that all shareholders should be granted the same rights, known as preemption. Existing institutional investors were offered £1.5 billion of mandatorily convertible notes that pay 9.75 per cent and must be converted to shares by the end of next June at 153p.

Critics argued that it would have been cheaper for Barclays to go to the Government. Barclays has denied that its capital-raising is costlier than seeking government funds.

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