HBOS takeover 'is a done deal' after vote

THE takeover of HBOS by Lloyds TSB is looking like a "done deal", according to analysts.

Speculation has been mounting in recent weeks about whether shareholders of both banks would back a deal that would almost inevitably lead to a huge wave of job cuts in Edinburgh and across the UK.

But the extent of approval by Lloyds TSB shareholders at a general meeting in Glasgow has convinced analysts that the deal will go ahead.

A resounding 96 per cent of Lloyds investors voted in favour of the takeover, despite vocal opposition from a number of private shareholders during the two-and-a-half hour meeting. For the takeover to go through, it now only needs to pass one further hurdle – the vote by HBOS shareholders at its general meeting on December 12.

Leigh Goodwin, an analyst at brokers Fox-Pitt Kelton, said: "It looks like a done deal. A lot of Lloyds shareholders are also HBOS shareholders and this increases the likelihood that HBOS shareholders will vote in favour."

Only 75 per cent of HBOS shareholders need to approve the deal for it to go ahead – and the vast majority of institutional shareholders, which make up about three quarters of investors in HBOS, are thought to be in favour.

If the merger goes ahead, it would create a banking giant with 145,000 staff and 3000 branches across the UK.

Chairman Sir Victor Blank confirmed that the Bank of Scotland brand would remain after the takeover, and the registered office of the new Lloyds Banking Group would be in Scotland.

Following the vote in favour of the deal, Sir Victor said: "This is overwhelming endorsement for the logic of the transaction."

Shane O'Riordain, a spokesman for HBOS, added: "We welcome the overwhelming vote in favour of our recommended merger.

"This is another very important milestone for our deal."

The route to the merger has also been eased by the failure of other parties to come up with an alternative proposal.

Intelligent Finance founder Jim Spowart had said that an international company was interested in joining the bidding for HBOS. But he admitted earlier this month that the interest had ended.

Scottish bankers Sir Peter Burt and Sir George Mathewson have campaigned to keep HBOS independent and were aiming to raise £500m which they said that, added to the £11.5bn Government bail-out, would be enough to allow the company to survive.

But they appear to have now conceded defeat after Chancellor Alistair Darling said earlier this week that there was no "automatic right of access" to Government funds.

Sir Peter said: "We are looking at it but we are not optimistic. We're starting to pull up the tent pegs but not the tent yet."