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Lloyds To Revise HBOS Takeover Bid

HBOS Takeover Videos

2:27pm UK, Monday October 13, 2008

Lloyds TSB has announced that it will revise the terms of its takeover of Halifax Bank of Scotland.

The Government had promised to change law to allow the deal

Lloyds had initially agreed to pay £9.8bn for its rival but there have been growing concerns that would be far too much after the recent plunge in HBOS shares.

The Government had encouraged the takeover and promised to change the law to allow the deal.

Taxpayers are set to become the biggest shareholders in the proposed new "superbank".

Lloyds TSB and HBOS plan to raise an extra £17bn to boost their balance sheets and are appealing to existing shareholders for a total of £13bn.

If - as seems likely - investors snub the offer, the Treasury will take them up, leaving it with a potential stake of up to 43.5% in the new business.

Credit Crunch

The latest news on the credit crunch.

Lloyds TSB and HBOS have renegotiated the terms of the takeover in the light of the government bail-out, with Lloyds paying just 0.605 of its shares for every HBOS one.

This values HBOS at around £6.9 billion.

HBOS investors will own just a fifth of the overall group, with Lloyds TSB shareholders potentially holding little more than a third, or 36.5%.

HBOS - the UK's biggest mortgage lender - has issued a profits warning, saying market conditions had "deteriorated significantly".

It also warned of a further write-downs on investments hit by the credit crunch and higher funding costs.

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Comments to the story

I think this deal is going to go through owing to the position of the institutions with holdings in both hbos and LTSB whose interest is in their overall position. What is inexplicable and should I think be held culpable is a LTSB board who appear to be ignoring the reality of taking over a failing company which will seriously damage their company in the medium term and in the long term will attract regulation on account to the monopolistic market share which will negate any benefits. As a shareholder I would like to see a motion of censure aagainst the entire board put at the next general meeting. Victor Blank May be Gordon's mate but that is not a reason for LTSB to bail out HBOS at the expense of LloydsTSB shareholders!
Posted By :alan symonds Report This
This holder of American ADR shares will be voting a resounding NO!!! to the HBOS deal. I personally believe that if the deal is rejected, we will all be seeing a dividend paid alot sooner than we'll be seeing if the deal goes through. I also believe that the British government is desperate to see this merger go through ... if it doesn't they be left holding HBOS which will make the Northern Rock fiasco look like a drop in the bucket. They want this deal to go through and if they feel it is in danger of being rejected by Lloyds shareholders, they'll grant concesssions. I emailed Lloyds investor relations to tell them I will be voting NO
Posted By :Penigmaz Report This
I am appalled at theproposal to merge Lloyds with HBOS. I am a pensioner relying on the dividend to supplement my income. Apart from the proposed loss of income my current holding is to be diluted to satisfy the terms of the merger. I continuerd to hold against my better judgement in the light of the fact that Lloyds were well capitalised and could weather the storm. I will be voting against
Posted By :H G Batty Report This

A couple of months ago I added a further 10000 shares to my already substantial holding in LloydsTSB following directors remarks that LLoydsTSB was well capitalised to weather the storm of the current financial crisis.Now what do I find - the share price has dived, but also very important to me, my dividend income looks likely to disappear in the next couple of years. I feel really let down and very very angry. I will be voting against this take over.
Posted By :Graham Report This
Yes, as a shareholder, I'm pretty angry about this. If I had wanted a Board that took gambles, I could have invested in Northern Rock. How do we get organised behind a "Just Say No to HBOS" vote - and after we've sorted that out, we can get rid of Victor blank too!!!
Posted By :Ian Turner Report This
i recently bought Lloyds tsb shares because i thought here is a bank not exposed to sub prime with a prudent sensible old fashioned style of banking.So i am horrified at this complete reversal of strategy in the proposed merger with Hbos. The dividend will be cut for at least two years and they will be needlessly exposed to high risk Hbos should be nationalised. I will be voting against this merger
Posted By :maureen bradford Report This