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Courts test HBOS takeover plans Courts test HBOS takeover plans
(about 12 hours later)
Halifax Bank of Scotland is entering the final stage of its takeover by Lloyds TSB. A petition has been lodged with the Court of Session in Edinburgh questioning the legal arrangements of Lloyds TSB's takeover of HBOS.
A hearing at the Court of Session in Edinburgh will test the two companies to make sure they have drawn up the correct legal arrangements. The last-minute intervention, filed by financial journalist Ian Fraser and economist Robert McDowell, could delay the court's decision on the deal.
The merger of the banking giants could then go ahead in the next few days. Lord Glennie will consider the Scheme of Arrangement - a legal process whereby one company takes over another.
If approved the new Lloyd's banking group could start trading next week.
Mr Fraser and Mr McDowell have raised five points they want Lord Glennie to consider.
They claim the issues have caused concern to shareholders and members of the public. They also want the Court to give its own view on the matters.
Cash injection
The scheme must be tested in court, independently of any company procedure or media coverage.
There have been repeated attempts to block the sale of HBOS. The last of these, threatened by HBOS pensioners, has now been withdrawn.There have been repeated attempts to block the sale of HBOS. The last of these, threatened by HBOS pensioners, has now been withdrawn.
The endgame has moved to the Court of Session, where Lord Glennie will test the robustness of complex legal preparations.
If he gives the green light, HBOS shares will stop trading on Wednesday, and stock in the newly-created Lloyds Banking Group will start trading from next Monday.
Meanwhile, the UK Government's injection of £17bn of capital will be confirmed, shoring up a troubled balance sheet.Meanwhile, the UK Government's injection of £17bn of capital will be confirmed, shoring up a troubled balance sheet.
No sudden changes are expected in branding or branch closures but the plan is for a cut of £1.5bn from the new bank's annual costs over the next three years, meaning a large number of job losses have been predicted. No sudden changes are expected in branding or branch closures but the plan is for a cut of £1.5bn from the new bank's annual costs over the next three years, which has prompted predictions of a large number of job losses.