Page last updated at 13:44 GMT, Tuesday, 11 November 2008

Brown dismisses a rival HBOS bid

Gordon Brown
The prime minister said only Lloyds TSB had made an offer for HBOS

Prime Minster Gordon Brown has dismissed calls for Lloyds TSB's takeover of Halifax Bank of Scotland (HBOS) to be scrapped.

It was the only "serious" bidder, he said, despite reports the Bank of China was in early talks on a rival offer.

His comments came after an attempted takeover by two former bank chief executives was rejected by HBOS.

Meanwhile Scottish financier, Jim Spowart, said nationalising HBOS would be preferable to Lloyds TSB takeover.

Mr Brown told his regular Downing Street press conference that there had been no announcement by any other financial institution that it was prepared to take on HBOS.

"The problem is that apart from Lloyds TSB no serious bid that is funded has actually come forward," the prime minister said.

"It is not going to change much if one person says he wants to, or they want to, take over a bank if they have got no money behind them. And that is the issue we face at the moment," he said.

Sole offer

It's impossible to ignore the very formidable obstacles faced by Sir Peter Burt and Sir George Mathewson
BBC Business Editor Robert Peston

Separately, Jim Spowart, who has been acting on behalf of another, unidentified, possible bidder for HBOS, said the option of nationalisation should be examined.

He also called for other potential offers to be looked at.

BBC business editor Robert Peston reported on Monday that Bank of China hoped to make a bid for HBOS.

However, he said that if Mr Spowart and Bank of China were anywhere near to making a formal offer, "they would by now have been forced to make a statement to that effect by the Takeover Panel".

Mr Spowart - who set up the Intelligent Finance online bank, a division of HBOS - would not confirm that Bank of China was the bidder.

Political issue

The debate over the future of the Lloyds-HBOS deal intensified after Sir Peter Burt, formerly of the Bank of Scotland, and Sir George Mathewson, ex-head of the Royal Bank of Scotland, said they should be appointed to lead HBOS.

They said they would take over temporarily as chairman and chief executive, come up with a plan to keep the bank independent and end the proposed 12bn Lloyds TSB takeover.

But HBOS's board said their plan offered no value to its shareholders.

Despite this, Sir Peter and Sir George say they still intend to call an extraordinary general meeting for HBOS shareholders to find out their views.

They say HBOS no longer needs to be rescued by Lloyds TSB, because the government and Bank of England have offered vital funds.

First Minister Alex Salmond said of Sir Peter and Sir George: "They are the two outstanding figures in the Scottish financial sector over the last generation, and therefore their views command great respect."

The Scottish National Party has been highly critical of the takeover. There are 17,000 jobs at stake in Scotland and it has become a highly-charged political issue.

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