Lloyds TSB proposes to takeover HBOS
Lloyds TSB has made a £12.2bn takeover bid for HBOS (Halifax and Bank of Scotland). This move provides Lloyds TSB with a unique opportunity to become one of the largest mortgage lenders in the UK, with a third of the market share.
Since the collapse of Lehman Brothers in the US many banks look set to loose billions. HBOS has been struggling for a while and the government has been monitoring them for the last few weeks.
Alistair Darling says the takeover was 'necessary' and the bid by Lloyds TSB should provide some financial stability to the housing market.
Lloyds TSB said that this move has been on the cards for sometime now and it is not an emergency rescue attempt.
"This will be a unique opportunity to accelerate and extend our strategy and create the UK's leading financial services group," said Lloyds chairman Sir Victor Blank.
Due to the size of the new company the transaction would not normally be permitted, however the government has sanctioned the takeover as financial stability is currently more important than any competition fears.
Lyndon Campbell, Head of Conveyancing at Simpson Millar LLP states: "Lloyds TSB’s takeover of HBOS should provide much needed confidence in the UK financial and housing markets."
James Mann, Independent Financial Advisor at Simpson Millar LLP commented: "It is hoped by the FSA that this takeover will improve stability in financial markets and the confidence of investors. Time will tell as to whether the takeover will have this effect."