HBOS trustees drop Lloyds merger objection
UK - The trustees of the HBOS Final Salary Pension Scheme (FSPS) announced today they will drop plans to delay the bank's takeover by rival Lloyds TSB until they received a funding guarantee for the scheme.
The trustees said they had met with Lloyds and their advisers and decided to reconsider the decision to ask the Court of Session in Edinburgh to postpone approval of the scheme of arrangement relating to the Lloyds TSB acquisition of HBOS.
In a statement, they added they do not want to jeopardise the capital raising programmes that have been planned by HBOS and Lloyds for next week.
"Having carefully considered the representations made by Lloyds TSB about the potential repercussions of any delay, particularly on the planned capital raising exercise which is due to commence on January 15, 2009, and in view of helpful statements made by Lloyds TSB to the trustees in the course of the discussions, the Trustees have decided that it would be in the best interests of all concerned not to proceed with legal action," read the statement.
They added: "We believe that the actuarial valuation process currently underway will, in due course, deliver the necessary security for the scheme and its beneficiaries, and look forward to further discussions with Lloyds TSB."
That said, the trustees are adamant they still have not received "satisfactory proposals" of support for the FSPS from the parent company of the enlarged group.
Therefore, they remain committed to pursuing an actuarial valuation as at December 31, 2008, and continue with a review of the scheme's investment strategy.
The trustees said they have been advised that the valuation could give rise to a deficit of between £3bn and £5bn.
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