HBOS Shares Slump Sparking Fears of Merger Fall- Through
THERE were fears for the solidity of the HBOS-Lloyds TSB Group merger package today as HBOS share slumped another 20% sparking off speculation that the banking group needs to be revalued. Gordon Brown Prime Minister has expressed great anxiety that the deal should go through, although normal the Office of Fair Tradign would intervene under the Monopoly Laws.
The £12.2bn rescue takeover of HBOS was thrown into doubt when shares slumped again.
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>> ALL SHARE TIPS Traders were betting millions of pounds that the Lloyds TSB deal to save Britain's biggest mortgage lender, owner of the Halifax, was at risk of falling apart.
At one point HBOS shares were down by more than 20%. They closed down 19.6p at a record low of 122.4p.
A failure to secure the deal would be a massive blow to the authority of the Prime Minister, who was closely involved in stitching it together last week.
It would also mark a new and even more dangerous phase of the financial crisis as HBOS is one of Britain's biggest banks with assets of £667bn, dwarfing Bradford & Bingley.
The new doubts about the merger deal that would create a huge 'superbank' represented in virtually every high street in the country came as share prices around the world were sent on a rollercoaster ride after the failure of the US Congress to approve a $700bn bail-out for American banks.