Lloyds TSB deal to save HBOS will complete in January

Lloyds TSB has said they expect to complete the deal with HBOS and capital raising by January and the shareholders will beable to vote on both by the third week in November. Lloyd’s have said that the shareholder should get a circular in the first week in November regarding the HBOS deal and capital raising. The meeting to approve both will be a couple of weeks after they have received the circular.

Last month the UK government broke the deal for Lloyds TSB to buy HBOS after the bank become troubled by the exposure to the weakening housing market and global financial crisis. Both HBOS and Lloyds TSB were forced to recapitalise last week under a government plan, the plan will see HBOS raise £11.5 billion and Lloyds raise £5.5 billion.

Shareholders will be offered the chance to buy shares in both banks, however if they decline and don’t take any shares the government will end up owning 43.5 percent stake in the merged super-bank.

After the government bailout, Lloyds TSB downgraded its offer to HBOS, offering 0.605 of its shares to each HBOS share originally the offer was 0.833. Once the deal is complete its expected that the new super bank will dominate the retail banking system and deliver annual cost savings of about £1 billion.

Source: uk.reuters