Wednesday, 12 November 2008

Chinese Take Away HBOS Offer

The Bank of China's bid to take over HBOS has been called off. The reason that China's second biggest bank walked away was apparently because of a cold shoulder from the Treasury who seem to be the only people still keen on the original, now stalled, Lloyds-TSB deal. Even the Lloyds-TSB board aren't as keen as the Treasury regarding their intitial proposal.

The Treasury have denied this saying:

"We wouldn't stand in the way of a serious alternative bid if one came forward and we certainly haven't put anybody off.

"We just want a stability package and that is what is on the table at the moment and has been backed by both the boards of Lloyds and HBOS."

However, while Scottish financiers like Jim Spowart, founder of Intelligent Finance who paved the way for the Bank of China approach, coming up with schemes better for Scottush jobs the Treasury does appear to push these alternatives aside too easily. There is clearly a preferred bidder and Gordon Brown is not playing fair. Tavish Scott the leader of the Scottish Liberal Democrats said:

"My deep concern is that the Prime Minister is pulling every string to stop any other rival bid. Journalists are being briefed, names are being released, bids are being discouraged.

"Vince Cable and I asked for a level playing field. There is no such thing from the UK government."

Other people are out there looking for alternative solutions to give the HBOS shareholders a choice of options at their AGM in less than an month. Osama Saeed, from the Islamic Foundation in Scotland has said that while he has spoken to interested parties in the Gulf they interest has waned because they are under the impression that the Lloyds-TSB deal is a fait accompli.

Gordon Brown may be right in saying that no serious bid with funding had actually come forward, apart from Lloyds TSB. But this may be down the the Treasury when approached with intial enquiries from China, the Gulf or elsewhere being let to believe that they mission is impossible from the offset.

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