HBOS board dismisses calls to end Lloyds TSB takeover
Sunday 9th November 2008, 10:52AM GMT.
HBOS has dismissed calls from two senior bankers to consider alternatives to its takeover by Lloyds TSB.
In an open letter, Sir Peter Burt and Sir George Mathewson, the former chief executives of the Bank of Scotland and the Royal Bank of Scotland said a takeover of HBOS by Lloyds TSB was no longer in the interest of shareholders in the company due to the Treasury’s bailout of the banking sector.
They called for the heads of HBOS to step down for continuing to support a deal they believe is “unfair to HBOS shareholders”. They also threatened to canvass support from shareholders to maintain HBOS’ status as an independent bank.
Responding to the statement, HBOS said it had looked at alternative proposals to the Lloyds deal and concluded that it was the best option available.
HBOS said: “We do not believe their proposal offers a significant prospect of value for HBOS shareholders, nor do we believe that it offers certainty of delivery for HBOS shareholders.
“Their proposal assumes that government capital would be on offer to them, but they provide no certainty that this will indeed be the case.”
It added that the deal would help it secure funding and would bring long-term benefits to shareholders such as synergies of £1.5 billion as well as the combined resources to weather a difficult economic climate.
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