Former bank chiefs move in on Lloyds TSB / HBOS merger

Sir George Mathewson, former chief executives of Royal Bank of Scotland (RBS) and Sir Peter Burt, former chief executive of Bank of Scotland (BoS), are trying to convince HBOS shareholders they will not benefit from the current Lloyds TSB deal on the table.

The merger of the two banking giants, which will create Lloyds Banking Group, was given the green light last weekend.

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

However, Sir George and Sir Peter both believe they should be appointed to lead HBOS and said the Lloyds TSB takeover would offer shareholders no cash, no value and is no longer the best deal.

On the BBC’s Good Morning Scotland today, Sir George said that two million small shareholders could receive as little as half the value they should, under the current Lloyds TSB deal.

HBOS has dismissed the statement and said the takeover is on track and will result in a stronger group, better positioned to access funding.

Meanwhile, in a letter to HBOS last Friday, Sir George and Sir Peter called for the resignation of chairman Lord Stevenson of Coddenham and chief executive Andy Hornby.

During his tenure, Sir George Mathewson assisted in the growth of RBS from £1 billion to £50 billion in capital, while Sir Peter was heavily involved in the Halifax merger with Bank of Scotland to form HBOS back in 2001.

The news comes just one week after it was reported that an unnamed bidder emerged and was in discussions with the Government with regard to acquiring HBOS.

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