Page last updated at 16:43 GMT, Wednesday, 5 November 2008

MSPs campaign over HBOS takeover

HBOS flag
Lloyds TSB is seeking to take over HBOS

Three MSPs have launched a campaign to put the 12.2bn HBOS takeover on hold to ensure other options are explored.

Lib Dem leader Tavish Scott, the SNP's Alex Neil and the Independent MSP Margo MacDonald said HBOS directors were not acting in shareholders' interests.

The trio said bosses were allowing Lloyds TSB to take over the bank without considering alternatives.

But the two banks said the proposed deal was the best option and stressed HBOS was not a "political plaything".

Lloyds TSB shareholders are to meet in Glasgow on 19 November to vote on whether to back the proposed acquisition.

In a letter to shareholders, Sir Victor Blank, Lloyds TSB's chairman, said the planned acquisition "represents a compelling opportunity to accelerate and extend Lloyds TSB's strategy and create the UK's leading financial services group".

'Dereliction of duty'

HBOS shareholders will meet in Birmingham on 12 December.

However, the MSPs want them to reject the deal, which they argue would lead to thousands of job losses.

Mr Scott said: "The non-executive directors of HBOS must explore all the options on behalf of shareholders, I think that's their duty here to explore all the options that are available."

Mr Neil said he was confident an alternative bid would come forward within the next week.

"The HBOS directors have not explored any other options other than the Lloyds TSB option - that is a dereliction of duty in our view," he said.

He has written to the Takeover Panel, which regulates mergers and acquisitions, requesting it suspend the takeover while an inquiry takes place.

It is vital that nothing is ruled in or ruled out at this stage
Liz Cameron
Scottish Chambers of Commerce
Ms MacDonald said information was being withheld from shareholders.

"There are any number of technical questions and good business practice questions that still have to be asked," she added.

However, Labour and the Conservatives accused the trio of political posturing.

Labour leader Iain Gray said: "For over a month now Alex Neil has been going on about an alternative bid.

"It is time he said who they are and they came to the table.

"It is irresponsible to raise hopes if there is in fact nothing concrete there."

'Political posturing'

Conservative leader Annabel Goldie said: "Unless Tavish Scott, Alex Neil and Margo MacDonald are bringing forward their own bid for HBOS, there is no other bid.

"For them to urge HBOS shareholders to reject the only bid on the table is utterly irresponsible - political posturing at its worst.

"The only alternative to the Lloyds TSB takeover, failing another bid, is effectively nationalisation of HBOS - not an outcome the bank, the taxpayer or anyone else wants to see."

Meanwhile, Liz Cameron, the chief executive of Scottish Chambers of Commerce, said the country needed a competitive banking sector.

HBOS is not a political plaything
Shane O'Riordain
HBOS spokesman
"All potential bids to secure the future of HBOS and its services must be measured against the criteria of what is best for the Scottish economy and best for Scottish business banking customers," she said.

"It is vital that nothing is ruled in or ruled out at this stage, and that all bidders and potential bidders are treated fairly and equitably."

HBOS spokesman Shane O'Riordain said the three MSPs had made a "very unhelpful intervention".

He told the BBC Scotland news website: "HBOS is not a political plaything. We are a company that employs many people across the UK, including Scotland.

"Our board is very mindful of its responsibilities to all stakeholders, including shareholders. We believe that a recommended deal with Lloyds TSB is the right transaction for everyone, including our Scottish stakeholders."

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