Bank merger legal challenge fails

A last-ditch attempt to block the takeover of Halifax Bank of Scotland (HBOS) by Lloyds TSB was dismissed by a court on Wednesday, clearing the way for HBOS investors to vote on the bank's Government-brokered takeover on Friday.

The Competition Appeal Tribunal (CAT) rejected the case from the Merger Action Group (MAG), a group of businessmen, bank customers and shareholders opposed to the takeover. MAG was challenging the Government's decision to waive competition laws to allow Lloyds to buy HBOS and prevent the Government being forced to nationalise the stricken mortgage lender.

An HBOS spokesman said: "We welcome today's clear and comprehensive judgment. We have always believed that this appeal had no merit and was an unnecessary and unhelpful distraction."

HBOS shareholders are expected to approve the deal at a vote on Friday. More than 96 per cent of Lloyds investors have backed the deal, which will complete in mid-January if approved. The Financial Services Authority gave its approval to the takeover yesterday.

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