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Lloyds revises HBOS takeover offer

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by Kay Mitchell

The terms of Lloyds TSB’s takeover for Halifax owner, HBOS, have been revised.

HBOS shareholders will now receive 0.605 shares for each HBOS share they own, revised from the original offer last month of 0.833.

The news comes as the Government announces a £37 billion rescue plan, which will see £20 billion injected into Royal Bank of Scotland (RBS) and a further £17 billion to be pumped into Lloyds TSB and HBOS.

HBOS will raise £11.5 billion from taxpayers, made up of £8.5 billion in ordinary shares and £3 billion in preference shares, while Lloyds TSB will receive £5.5 billion. However, the terms are dependent on the success of the merger.

When the merger reaches a satisfactory conclusion, HBOS chairman Lord Dennis Stevenson and chief executive Andy Hornby will both part ways with the bank.

Following the news, shares in HBOS fell 10.8p to 113.4p, while Lloyds TSB gained 20p to 209½.

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News posted: October 13, 2008

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