Brown defends HBOS deal
01 October 2008
Prime Minister Gordon Brown has responded to growing doubts over the proposed rescue deal of UK bank HBOS, according to a report.
The Times says that Prime Minister Brown was "personally fighting" to save the deal after HBOS lost over £1 billion of its share value yesterday.
HBOS saw its shares slump by up to 20 per cent yesterday and the newspaper reports that traders were expecting Lloyds TSB to block the deal under its current terms.
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This uncertainty around the rescue package saw the Prime Minister publicly defend the deal saying he was confident that Lloyds TSB would take over HBOS - a merger that he himself helped along by waiving UK competition rules.
Lloyds TSB is currently offering 0.833 shares for every share in HBOS - but the stock market is now putting the value of HBOS at around 35 per cent less than this, something which shows that the deal will not go ahead in its current form, according to an investor cited in The Times.
HBOS Chief Executive Andy Hornby has said that the merger of the two institutions would create a "financial powerhouse", reports the Daily Express.
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