Lloyds shareholders back HBOS takeover
Nov 20 2008 by Iain Laing, The Journal
LLOYDS TSB shareholders have backed the proposed takeover of ailing rival HBOS. The shareholders voted 95.98% in favour of the controversial deal at the Lloyds TSB Group general meeting in Glasgow.
They also backed plans to raise a total of £5.5bn through the issue of new shares and special preference shares to strengthen Lloyds’ balance sheet.
If the merger gets the go-ahead, it will create a banking giant with around 145,000 staff and 3,000 branches across the UK.
The vote was comprised of the electronic vote from the majority of the 401 shareholders at yesterday’s meeting.
This was added to those who cast their vote by proxy.
Paper votes on the eight resolutions, all of which were approved, are being counted and the full results of the polls will be announced to the Stock Exchange later.
Lloyds TSB chairman Sir Victor Blank said the result of the vote was an “important milestone” in the history of the company.
“This is an overwhelming endorsement for the logic of this transaction,” he added.
Unions and politicians staged a protest outside the Scottish Exhibition and Conference Centre ahead of yesterday’s meeting.
They are worried over thousands of possible job cuts through the £1.5bn planned cost savings of a resultant takeover.
Concerns over the necessity for the merger and potential redundancies were also voiced by shareholders during the meeting, which lasted nearly three hours.
Sir Victor told shareholders the acquisition would transform the bank’s position in the highly competitive UK market.
He added: “We do appreciate that many of our employees may feel apprehensive at this time but, in creating what we believe will be the UK’s leading financial services company, we believe the combination will generally provide enhanced opportunities for those who work in our group.”
The chairman said it was “inevitable” that there would be some rationalisation, but that employees would be consulted.
One shareholder expressed his dismay that the Government had gone above competition rules for the proposed merger to be considered and told the meeting: “Most of us think this deal stinks.”
Another said shareholders were being “robbed” and questioned if the banking system was in such dire straits, whether the merger was necessary.
Sir Victor said: “For very complex reasons, originating in the United States, we have had a banking system which has essentially nearly collapsed.
“The Government have had to step in in order to secure the position of banks.”
He added that the current economic situation which everyone found themselves in was one of “extraordinary chaos”.
