OFT report on Lloyds TSB takeover of HBOS is with UK Government

The Office of Fair Trading (OFT) has submitted its report to the UK Government on on the proposed takeover of HBOS by Lloyds TSB. The Government says that it will publish the report ‘shortly’, when it has had time to consider its findings. Since the deal was actually  brokered by the Government, it is expected to support it.

Llloyds TSB says that it expects to have completed the deal by January 2009, after an EGM in the third week in November to approve the deal.

Both Lloyds and HBOS are to issue management statements on their financial progress, together, in the first week of November.

Lloyds will then also send out to shareholders a statement on the proposed acquisition  and the capital raising to support it. It is to raise £4.5bn from ordinary shares and £1bn from preference shares. HBOS is to raise £8.5bn of its total commitment of £11.5bn from a share issue. It is anticipated that 43% of the new ‘superbank’ will be owned by the state, making up the expected shortfall in the recapitalisation programme.

Under the revised deal, HBOS shareholders will receive 0.606 shares for each of their HBOS shares.