Legal challenge for HBOS takeover

HBOS shareholders will vote on the deal on 12 December

A legal challenge to the takeover of Halifax Bank of Scotland (HBOS) by Lloyds TSB has started in London.

The Competition Appeal Tribunal is considering whether the government was right to bypass competition concerns in allowing HBOS to be rescued.

The case has been brought by an organisation calling itself the Merger Action Group (MAG).

HBOS is confident the ruling, due on Tuesday, will approve the deal, ahead of the final shareholder vote.

"It is time that people stopped using HBOS as a plaything," said HBOS spokesman Shane O'Riordain.

"We're confident the appeal will be unsuccessful and we would then ask this self-appointed group to withdraw."

Fast-tracked

MAG is a group of businessmen, bank customers and shareholders who feel that allowing Lloyds TSB to buy HBOS will be bad for Scotland's economy .

They say that Business Secretary Lord Mandelson's decision to allow the deal to go ahead was based on new legislation that had not been in place at the time it was announced.

The legal process has been fast-tracked to ensure there will be a ruling before the HBOS shareholders vote on the deal on 12 December.

Although the tribunal is being held in London, it is being heard under Scottish law.

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