Lloyds Banking Group moved one step closer to becoming a reality yesterday as Lloyds TSB shareholders voted in favour of the proposed acquisition of HBOS.
Almost 96 per cent of Lloyds TSB
shareholders voted in favour of the move that will, according to Lloyds chairman Sir Victor Blank, create, "the UK's leading financial services company," comprising of 145,000 staff and around 3,000 branches.
Commenting on the results, Graham Spooner, investment advisor at The Share Centre, said: "It appears shareholders are banking on the future benefits that a takeover of this size could bring. If HBOS
shareholders also support the vote, as expected, the takeover will create a powerful entity on the high street, which should offer some long term value for investors.
In addition to approving the takeover, Lloyds TSB shareholders voted in favour of the banks proposed capital raising of £5.5billion through the Government's bank bail out plan.
But the proposals have gained mixed reactions from shareholders and staff.
The majority of opposition to the acquisition has come from protesters who believe that with recapitalisation from the Government, HBOS could survive on its own. However, the Chancellor dashed these hopes with a statement pointing out that participation in the Government bail out was not a certainty and should not be relied upon by HBOS.
As Lloyds shareholders decided the fate of HBOS yesterday, protesters, including Lloyds TSB and HBOS staff, rallied outside over concerns for their jobs. Mr Spooner added:
"The focus of the takeover is now likely to be on the necessary job cuts. Lloyds TSB and HBOS employ 145,000 staff between them. Lloyds expects the takeover to save £1.5billion pounds a year by 2011, largely through thousands of job cuts."
All that is left now is for HBOS shareholders to vote on December 12, and experts expect them to give the acquisition the go ahead as there has been little sign of a serious alternative.
Given the go ahead by HBOS, Lloyds Banking Group could exist as early as January 2009.
© Fair Investment