Shareholders in banks set to shore up their finances with taxpayers' money have been warned that rejecting the current deals could prove costly.
Shareholders in banks set to shore up their finances with taxpayers' money have been warned that rejecting the current deals could prove costly.
The Chancellor, Alistair Darling, issued a warning as Lloyds TSB shareholders prepared to vote on the bank's takeover of HBOS on Wednesday.
The Chancellor, Alistair Darling, issued a warning as Lloyds TSB shareholders prepared to vote on the bank's takeover of HBOS on Wednesday.
The proposal has met opposition from two senior Scottish bankers, who said HBOS could remain independent.
The proposal has met opposition from two senior Scottish bankers, who said HBOS could remain independent.
The takeover is expected to be voted through by Lloyds TSB shareholders.
The takeover is expected to be voted through by Lloyds TSB shareholders.
HBOS investors will vote on the deal next month.
HBOS investors will vote on the deal next month.
The Royal Bank of Scotland shareholders will also vote on Thursday over plans to raise £20bn of capital.
The Royal Bank of Scotland shareholders will also vote on Thursday over plans to raise £20bn of capital.
Ahead of the votes, Mr Darling said that any attempts by any of the banks to renegotiate the government's £37bn bail-out of the UK banking sector could prove more costly for shareholders.
Ahead of the votes, Mr Darling said that any attempts by any of the banks to renegotiate the government's £37bn bail-out of the UK banking sector could prove more costly for shareholders.
He said that access to the government deal was not "automatic" and that any bank seeking a new package risked getting a far lower share price than when the offer was first made.
He said that access to the government deal was not "automatic" and that any bank seeking a new package risked getting a far lower share price than when the offer was first made.
Takeover opposition
Takeover opposition
The government's plan to inject capital into banks by buying share stakes in them has been taken up by HBOS, Lloyds and the Royal Bank of Scotland last month.
The government's plan to inject capital into banks by buying share stakes in them has been taken up by HBOS, Lloyds and the Royal Bank of Scotland last month.
Earlier this month, Sir Peter Burt, formerly of the Bank of Scotland, and Sir George Mathewson, ex-head of the Royal Bank of Scotland, tried to block the HBOS merger with Lloyds TSB.
Earlier this month, Sir Peter Burt, formerly of the Bank of Scotland, and Sir George Mathewson, ex-head of the Royal Bank of Scotland, tried to block the HBOS merger with Lloyds TSB.
The two have argued that HBOS could survive on its own, drawing on the funds on offer under the government's bail-out package.
The two have argued that HBOS could survive on its own, drawing on the funds on offer under the government's bail-out package.
However that would mean re-negotiating with the government.
However that would mean re-negotiating with the government.
The chancellor signalled that there was "no automatic right of access to the recapitalisation scheme".
The chancellor signalled that there was "no automatic right of access to the recapitalisation scheme".
"The institution must have a sustainable business model and delivery plan," he said.
"The institution must have a sustainable business model and delivery plan," he said.
The Financial Services Authority has estimated HBOS would have to raise £12bn if the takeover did not go ahead.
The Financial Services Authority has estimated HBOS would have to raise £12bn if the takeover did not go ahead.
Mr Darling was later accused by an SNP MSP of seeking to scupper plans that could keep HBOS independent.
Mr Darling was later accused by an SNP MSP of seeking to scupper plans that could keep HBOS independent.
Alex Neil said: "Once again the Treasury seems to be doing everything it can to inject doubt and frustrate alternate plans that could keep HBOS independent and safeguard competition and tens of thousands of jobs."
Alex Neil said: "Once again the Treasury seems to be doing everything it can to inject doubt and frustrate alternate plans that could keep HBOS independent and safeguard competition and tens of thousands of jobs."
Criticism also came from the Scottish Liberal Democrat leader, Tavish Scott, who said: "Is the chancellor really saying he will allow an independent HBOS to collapse? That is not a credible statement from the UK Government."
Criticism also came from the Scottish Liberal Democrat leader, Tavish Scott, who said: "Is the chancellor really saying he will allow an independent HBOS to collapse? That is not a credible statement from the UK Government."
Are you a Lloyds TSB shareholder? What do you think of this takeover deal? Send us your comments and opinions using the form below:
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below.
