The prime minister defied growing stock market scepticism of Lloyds TSB’s planned rescue takeover of HBOS yesterday, saying he still expected the deal to go ahead in spite of the mortgage lender’s plummeting share price.
Lloyds is offering 0.83 of a share for every HBOS share, which yesterday would have valued the bank at 188p. HBOS closed at 122.5p last night, a discount of more than 30 per cent to the offer price, triggering speculation the deal could be renegotiated.
Gordon Brown said in an interview with Sky News the deal would go ahead and Lloyds stressed that it was committed to the all-share deal.
If there are investor concerns about the deal, the discount to the offer price will make it hard for Lloyds shareholders to vote it through and Lloyds and HBOS might have to change the terms.
Financial Times, The Times, Daily Telegraph