|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Saturday 06th of December 2008
September 30, 2008

Concerns over Lloyds TSB rescue deal for HBOS


by Kay Murchie
”Concerns

Banking shares have been the sharpest fallers on the FTSE 100 today in London as it was announced late last night that the US $700 billion (£380 billion) bailout scheme was rejected after it failed to gain support from Congress who voted against the proposed scheme.

One of the biggest fallers today was HBOS who lost 12% as speculation mounted that Lloyds TSB may be forced to change the terms of its £12.2 billion rescue deal.

Shares in HBOS fell to a new low of 125p this morning and follows an 18% fall yesterday, after it was announced that the UK’s largest buy-to-let lender, Bradford & Bingley, was to be nationalised.

According to The Times, an investor in HBOS and Lloyds TSB said ‘the market is telling you the deal will just not go ahead in its current form‘.

Meanwhile another investor said the deal has looked potentially over-ambitious from the start, particularly when analysts said a large amount of extra capital would be required from Lloyds TSB.

However, it is understood that the involvement of the Government will mean the takeover will not fail.

In the meantime, the Bank of England’s Governor, Mervyn King, has met with Prime Minister Gordon Brown, and Chancellor Alistair Darling for a breakfast meeting today as the financial system is on the verge of meltdown.

It is understood that the prospect of a stability package is being discussed with an announcement due later today.

Yesterday Mr Brown said he would do ‘whatever it takes’ to preserve the stability of the banking system.

Discuss this in the Finance Markets forums

Story link: Concerns over Lloyds TSB rescue deal for HBOS


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

 

Previous: « US $700bn bailout rejected
Next: UK economy fails to grow »

Visited 1030 times, 4 so far today