Scottish grandees to press on with HBOS plan

The two Scottish banking grandees trying to scupper Lloyds TSB's takeover of the rival HBOS said yesterday they have no plans to give up, despite the Prime Minister Gordon Brown and the Opposition leader David Cameron both agreeing there was no real alternative to the deal.

Sir George Mathewson and Sir Peter Burt, former chief executives of Royal Bank of Scotland and Bank of Scotland respectively, want to take management control of the Edinburgh-based HBOS and consider alternative options for the bank.

They said the Lloyds deal – put together over a weekend under Government pressure to rescue the Scottish-based institution – was rushed and that HBOS did not take the time to look into other options to present shareholders with the best outcome.

"A properly recapitalised, properly run and independent HBOS appears to be in the interests of the shareholders, its employees, its customers and all stakeholders, avoiding the dangers of an anti-competitive over-mighty leviathan,"Sir Peter and Sir George said in a statement yesterday.

"HBOS shareholders are entitled to know the basis for the board's decision and why the board decided not to seek this route as opposed to simply selling out," Sir Peter and Sir George said. HBOS responded that it stands by the Lloyds deal. "They are not providing anything tangible for shareholders or any certainty," a spokesman for the bank said. "The Lloyds deal provides certainty and is a recommended deal that will provide value for shareholders."

Sir Peter and Sir George said that if installed they would consider all options and "seek either shareholder support for a corporate transaction or alternatively would finalise a plan to keep HBOS independent," using the Government's bailout facility for banks.

The deal, first announced in September, was renegotiated along terms more favourable to Lloyds on 13 October after a month of chaos in the financial sector undermined valuations.

Authorities waived competition rules to allow the takeover and the Government has offered to give the combined bank £17bn of public money as part of a rescue plan for all banks. This could give it a 43.5 per cent stake.

The Financial Services Authority said the deal with Lloyds provided "a sustainable medium-term future for HBOS in a way that none of the alternative scenarios does", and several top shareholders said this week they did not expect Sir Peter and Sir George's proposals to be taken seriously.

Mr Brown earlier this week dismissed calls for the deal to be scrapped, insisting Lloyds was the only "serious" bidder.

Derek Simpson, joint general secretary of the Unite trade union, which represents HBOS employees, said: "Unite has serious doubts about the plans by Sir Peter Burt and Sir George Mathewson and their motives. They have failed to come up with any concrete proposals or any money, and it is irresponsible of them to threaten the proposed merger between HBOS with TSB."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent