HBOS campaigners in fastrack bid

By Douglas Fraser
BBC Scotland's business and economy editor

HBOS is subject to a takeover by Lloyds TSB Read Douglas Fraser's blog

The campaign group trying to use an appeal to block the takeover of Halifax Bank of Scotland by Lloyds TSB has secured a rapid acceleration of the usual legal process.

The Merger Action Group, led by Edinburgh architect Malcolm Fraser along with Scottish business figures, will make its case against the UK Government's go-ahead at the first stage of the hearings system on Wednesday in London.

This case management conference is to consider if there should be a full hearing, and it is expected that would take place before the 12 December HBOS shareholders' meeting in Birmingham, at which Lloyds and HBOS hope to put a seal on their deal.

The process usually gives three weeks simply for people to file their submissions, but that has been cut to four days including the past weekend.

Banking competition

The London-based Competition Appeal Tribunal is made up of senior judges who hear challenges to the decisions of ministers on the takeover of companies.

This challenge is to Lord Peter Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform, who ruled last month that warnings about a limit to banking competition from the Office of Fair Trading should be overlooked, and that there would be no reference to the Competition Commission.

The appeal is on the grounds that Lord Mandelson's decision was constrained by a promise already made by the Prime Minister Gordon Brown to let the takeover go ahead, and that Lord Mandelson then behaved "unreasonably and irrationally" by failing to take account of changed circumstances when both Lloyds TSB and HBOS had to be bailed out during October.

This is quicker than usual because of the timescales involved. I would imagine that the full hearing would be heard fairly quickly Merger Action Group spokesman

Government lawyers have moved swiftly to compile a response to the challenge, and it is understood that the banks can also make submissions to the hearing.

A spokesman for the Merger Action Group commented: "This is quicker than usual because of the timescales involved. I would imagine, given the circumstances, that the full hearing would be heard fairly quickly. That would certainly be our intention".

Mr Fraser, who planned the refurbishment of HBOS headquarters in Edinburgh, added: "Obviously, the Treasury takes this very seriously. And we would assume that they've been burning the midnight oil over the weekend for this to be done so quickly".

Final bid

A spokeswoman for the Department of Business, Enterprise and Regulatory Reform confirmed the appeal would be fought, but made no other comment.

Organisers of the campaign group say 300 people have already signed up since announcing they were using the Appeals Tribunal as a final bid to block the takeover, though few have been named so far.

Previous attempts to block the HBOS takeover have failed, including two senior Scottish bankers appealing to shareholders to let them take over the running of the bank to seek a better deal, and a bid to find a rival buyer, with interest reported from the Bank of China.