Lloyds TSB HBOS competition appeal rejected

11 December 2008 / by Rebecca Sargent
An appeal against the waiver of competition rules which could allow Lloyds TSB and HBOS to merge was rejected last night by the Competition Appeal Tribunal (CAT).

The decision means that when HBOS shareholders vote tomorrow, the merger could finally be on its way to becoming a reality.

Since the news first emerged of a proposed merger between the banking giants, it has been met by opposition, particularly from Scottish business people who believe that HBOS should remain independent.

The Merger Action Group is a collaboration of former and current staff, customers and business people who, according to a statement, are still considering appealing the decision of the Competition Appeal Tribunal, despite the group's arguments being dismissed as having no 'substance'.

Commenting, MAG spokesperson, Malcolm Fraser said: "We will now be having intensive meetings with our legal team regarding a possible appeal to the findings of the tribunal.

"It remains our belief, shared by many, that allowing this proposed merger to go forward without due, and proper consideration by the Competition Commission, sets a dangerous precedent."

The Government gave the merger between Lloyds TSB and HBOS the green light in October when the future of HBOS hung in the balance. And, despite the fact that a merger would result in a 'super bank', competition rules were ripped up in order to give the go ahead for the rescue of HBOS.

Some opponents to the merger claim that HBOS could survive alone with participation in the Government's bail out plan. However, the Chancellor has condemned this notion, warning that taking part in the bail out is not guaranteed and HBOS must have more to fall back on.

Lloyds TSB shareholders voted in favour of the acquisition last month and it is expected that HBOS investors will do the same tomorrow, a move which, according to reports, could create a banking group with 145,000 staff and 3,000 branches nationwide.

© Fair Investment Company Ltd