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November 30, 2008

Action group mounts legal challenge to Lloyds TSB / HBOS merger

by Gill Montia

Story link: Action group mounts legal challenge to Lloyds TSB / HBOS merger

A Merger Action Group (MAG) has been formed to bring a legal challenge to the proposed merger of Lloyds TSB and HBOS.

The takeover was announced in September, with the all-share deal approved by the Government, which was prepared to put aside competition issues to see HBOS rescued by its more stable competitor.

The merger has since been criticised from a number of quarters as representing poor value for shareholders, the taxpayer and consumer.

According to the MAG website, the group comprises businessmen, customers, account holders and shareholders, who are mounting a legal challenge against the UK Government’s decision to allow the merger to take place without referring it to the Competition Commission.

The group’s spokesman is Malcolm Fraser, who heads the firm of architects that undertook work on the recent refurbishment of HBOS’s Edinburgh headquarters.

The action takes the form of an application to the Commission Appeal Tribunal, which has the power to review the terms of the merger.

However, the case will be considered at a preliminary hearing this week, which will consider whether the arguments warrant further action.

HBOS shareholders are due to vote on the merger on 12th December; if it goes through, job losses could top 40,000, according to analysts’ estimates, from the combined banks’ 145,000 pool of staff.


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