British bank Lloyds TSB on Thursday agreed to buy rival HBOS for £12.2 billion (US$21.8 billion) as the raging global financial storm claimed another victim.
The share price of HBOS rocketed 50.9 percent to 222 pence in reaction to the takeover bid, pitched at 232 pence per share and aimed at creating Britain’s third-largest bank behind Royal Bank of Scotland and HSBC in first place.
“Lloyds TSB and HBOS announce that they have reached agreement on the terms of a recommended acquisition by Lloyds TSB of HBOS,” the pair said in a statement.
Analysts estimate that up to 40,000 jobs could be lost from the banks’ combined 145,000 staff following the deal and that hundreds of branches could close. HBOS has 1,100 on Britain’s high streets and Lloyds TSB 1,900.
British Business Secretary John Hutton is effectively extending Britain’s Enterprise Act to ensure that the deal goes through “on public interest grounds,” his department said in a statement shortly after the deal.
The landmark all-share merger, effectively a rescue plan for Britain’s biggest mortgage lender, comes after HBOS shares plummeted in recent trading following days of global stock market chaos and economic gloom.
Lloyds TSB shareholders would own 56 percent of the issued share capital under the acquisition and existing HBOS shareholders 44 percent.
HBOS, or Halifax Bank of Scotland, is the latest global bank to fall foul of the ongoing credit crunch following the collapse of US group Lehman Brothers, the sale of Merill Lynch and the rescue of insurer AIG earlier this week.
“This is the right transaction for HBOS and its shareholders,” HBOS chairman Dennis Stevenson said in the release.
“Against the backdrop of the very high levels of volatility our industry is experiencing, the combined group will be one of the strongest players in the UK financial services sector,” he said.
Analysts and regulators expressed hope that the rescue takeover deal would draw a line under persistent questions about the funding of HBOS that have dogged its share price.
The value of shares in HBOS — created by the merger of Bank of Scotland and Halifax in 2001 — had slumped 55 percent so far this week.
Many market watchers had feared that HBOS could have faced the same fate as Northern Rock — which was nationalized earlier this year after experiencing severe funding problems and a run on its branches late last year.
HBOS and Lloyds TSB together hold nearly a third of Britain’s savings and mortgage market, but competition watchdogs will not block the deal, which was expected to be completed toward the end of the year or early next year.
The deal was described by regulator the Financial Services Authority as “a welcome move as it is likely to enhance stability within financial markets and improve confidence among customers and investors.”
Also See: Morgan Stanley may be next in trouble
Taiwan is projected to lose a working-age population of about 6.67 million people in two waves of retirement in the coming years, as the nation confronts accelerating demographic decline and a shortage of younger workers to take their place, the Ministry of the Interior said. Taiwan experienced its largest baby boom between 1958 and 1966, when the population grew by 3.78 million, followed by a second surge of 2.89 million between 1976 and 1982, ministry data showed. In 2023, the first of those baby boom generations — those born in the late 1950s and early 1960s — began to enter retirement, triggering
ECONOMIC BOOST: Should the more than 23 million people eligible for the NT$10,000 handouts spend them the same way as in 2023, GDP could rise 0.5 percent, an official said Universal cash handouts of NT$10,000 (US$330) are to be disbursed late next month at the earliest — including to permanent residents and foreign residents married to Taiwanese — pending legislative approval, the Ministry of Finance said yesterday. The Executive Yuan yesterday approved the Special Act for Strengthening Economic, Social and National Security Resilience in Response to International Circumstances (因應國際情勢強化經濟社會及民生國安韌性特別條例). The NT$550 billion special budget includes NT$236 billion for the cash handouts, plus an additional NT$20 billion set aside as reserve funds, expected to be used to support industries. Handouts might begin one month after the bill is promulgated and would be completed within
The National Development Council (NDC) yesterday unveiled details of new regulations that ease restrictions on foreigners working or living in Taiwan, as part of a bid to attract skilled workers from abroad. The regulations, which could go into effect in the first quarter of next year, stem from amendments to the Act for the Recruitment and Employment of Foreign Professionals (外國專業人才延攬及僱用法) passed by lawmakers on Aug. 29. Students categorized as “overseas compatriots” would be allowed to stay and work in Taiwan in the two years after their graduation without obtaining additional permits, doing away with the evaluation process that is currently required,
IMPORTANT BACKER: China seeks to expel US influence from the Indo-Pacific region and supplant Washington as the global leader, MAC Minister Chiu Chui-cheng said China is preparing for war to seize Taiwan, Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said in Washington on Friday, warning that Taiwan’s fall would trigger a regional “domino effect” endangering US security. In a speech titled “Maintaining the Peaceful and Stable Status Quo Across the Taiwan Strait is in Line with the Shared Interests of Taiwan and the United States,” Chiu said Taiwan’s strategic importance is “closely tied” to US interests. Geopolitically, Taiwan sits in a “core position” in the first island chain — an arc stretching from Japan, through Taiwan and the Philippines, to Borneo, which is shared by
RSS