LONDON, Oct 3: British banking group Barclays Plc on Friday threw in the towel and admitted defeat in its attempt to make its investment banking unit BZW a major player on the global stage.Barclays said it plans to sell the equities, equity capital markets and mergers and acquisitions parts of BZW and would prefer to do so as one package.The most often mentioned name as a potential buyer for BZW has been Germany's Commerzbank, which has often stated it wants to expand strongly in London and which on Friday refused to comment on whether it would bid.Barclays chief executive Martin Taylor, who had consistently defended the bank's big investment in BZW, said it had to be broken up because of the changing nature of the business and the recent growth in the investment needed for success.He told reporters in a conference call that Barclays management had decided that in order to make the equities and M&A business compete they would have had to make a huge investment but that the returns from this would not be enough."What we wanted to avoid doing was throwing huge amounts of money at the equity business and not making it," Taylor said. "We've come to the conclusion that by far the most sensible way to go is to find a buyer. and let them decide the exact amount and direction of investment that's appropriate."Barclays said BZW's markets division, which includes treasury and foreign exchange, and debt-related, lending and private equity will be formed into a new group called Barclays Capital Group while a buyer will be sought for equities, equity capital markets and mergers and acquisitions.Barclays said BZW chief executive Bill Harrison, brought into the investment bank less than two years ago to revitalise it, has resigned.Taylor said that after Harrison joined, he and Bob Diamond, who will now head Barclays Capital, had set about improving the profitability of the markets side of the business and had only turned their attention fully to equities this summer."We came to the conclusion that we needed to do something different," Taylor said. "There comes a point when a business needs not just a major investment in people and systems but may be a major acquisition as well, I don't know."Taylor said Barclays had concluded that for the business to provide "best value" that it should become part of a business with "complimentary skills."Harrison, speaking in the same conference call, said BZW had a major presence in the UK market, numbering 20 out of the blue-chip FTSE 100 index as clients.He said BZW had an important brokerage business and was making in roads into the European market, being involved in issues for Telecom Italia and Endesa in Spain.But Harrison said very large investment was required. "Thereare some very big aeroplanes," he said, referring to bulge-bracket U.S. Investment banks like Goldman Sachs, Merrill Lynch and Morgan Stanley Dean Witter.Rumours that Barclays might sell BZW have been rife in the city for months but intensified this week as Barclays share price rose on speculation that it might sell all or part of BZW to a foreign bank.Barclays shares dived 116 pence on Friday to 16.31 pounds ($ 26.29), after jumping 84 P to a record 18.05 on Thursday, as dealers expressed some concern over the sale process, with no buyer yet identified.Taylor said Barclays had not yet opened negotiations with anyone over the sale but added it would rather sell the businesses as one package.
