Lloyds HBOS takeover: 0.6 instead of 0.83?

Fella

The original deal was for HBOS shareholders to receive 0.83 of a Lloy share per HBOS share.

Today's closing price was Lloy 2.50 & HBOS 1.48

The City is pricing the shares at a deal price of 0.60 of a Lloy share per HBOS share.

I reckon we'll hear an announcement soon that this deal has been renegotiated....

stebiz

Fella wrote: »

The original deal was for HBOS shareholders to receive 0.83 of a Lloy share per HBOS share.

Today's closing price was Lloy 2.50 & HBOS 1.48

The City is pricing the shares at a deal price of 0.60 of a Lloy share per HBOS share.

I reckon we'll hear an announcement soon that this deal has been renegotiated....

I have just piled in today for another 6k on the basis that they won't.

Stebiz

Exo

As Halifax/HBOS are no longer viable on their own, it will mean another nationalised bank or the government will apply pressure for the deal to go through as it is. I think the latter will apply.

Fella

To clarify, I'm not suggesting it won't go through. I'm suggesting it won't go through on the original terms. I think HBOS owners will get less than 0.83 of a Lloy share per HBOS share.

Doozergirl

Could it be because of the fluctuation in LloydsTSB share price? Presumably they wouldn't be happy giving HBOS shareholders 0.83 of a share if LloydsTSB price has dropped since the original offer? The actual price they pay for HBOS doesn't change but the ratio between the two share prices does, iyswim?

stebiz

Fella wrote: »

To clarify, I'm not suggesting it won't go through. I'm suggesting it won't go through on the original terms. I think HBOS owners will get less than 0.83 of a Lloy share per HBOS share.

Yes but these shares are up and down. If they renegotiate, they could be doing the same next week, or even in the morning if the markets go 'bull' again.

Stebiz

marvin

If anything is going to be renegotiated it is the secret deal, what ever it is, that the Government has given this deal to make it go through. Remember LTSB wanted to buy Northern Rock but the Government would not give them the deal they wanted (can't remember off hand what it was somewhere about £50bn of guarentees I think) That is something the Government regretted in the end as they had to Nationalise NR and that lead to the nationalisation of B&B. Without the one we would probably not have had the other.

This deal will go through in Gordon's words whatever the cost, but I doubt the share swap rate will change.

Fella

Doozergirl wrote: »

Could it be because of the fluctuation in LloydsTSB share price? Presumably they wouldn't be happy giving HBOS shareholders 0.83 of a share if LloydsTSB price has dropped since the original offer? The actual price they pay for HBOS doesn't change but the ratio between the two share prices does, iyswim?

stebiz wrote: »

Yes but these shares are up and down. If they renegotiate, they could be doing the same next week, or even in the morning if the markets go 'bull' again.

Stebiz

No. With respect, both of you have the wrong idea about what has been agreed. The current deal is based on 0.83 of a Lloy share per 1 HBOS share. The actual price paid for HBOS DOES change, it's entirely dependent upon the price of Lloy shares.

The key thing here is the differential between the two. If the deal was a certainty then the HBOS shareprice should be exactly 83% of the Lloy share price (whatever the Lloy shareprice is). Therefore with Lloyds shares currently £2.50 HBOS should be £2.075. But in fact they are £1.48

This is because when the market closed today, the market was pricing in that this deal would be renegotiated.

(Which doesn't mean it WILL be negotiated - things are changing on an hourly basis right now so who knows what will happen - but that's what the market is saying).

If you disagree, buy HBOS! If the deal was a certainty then buying HBOS shares right now is effectively the exact same thing as buying Lloy at a huge discount to their current shareprice.

fatpig_2

Fella wrote: »

.

I reckon we'll hear an announcement soon that this deal has been renegotiated....

I sincerely hope so. Even better would be news that it is to be scrapped altogether.

Not content with going down the toilet itself a crap bank, HBOS, is attempting to take a well run Bank Lloyds TSB with it

superstar_2

I thought this deal was done and dusted, is it not?

stebiz

Fella wrote: »

No. With respect, both of you have the wrong idea about what has been agreed. The current deal is based on 0.83 of a Lloy share per 1 HBOS share. The actual price paid for HBOS DOES change, it's entirely dependent upon the price of Lloy shares.

The key thing here is the differential between the two. If the deal was a certainty then the HBOS shareprice should be exactly 83% of the Lloy share price (whatever the Lloy shareprice is). Therefore with Lloyds shares currently £2.50 HBOS should be £2.075. But in fact they are £1.48

This is because when the market closed today, the market was pricing in that this deal would be renegotiated.

(Which doesn't mean it WILL be negotiated - things are changing on an hourly basis right now so who knows what will happen - but that's what the market is saying).

If you disagree, buy HBOS! If the deal was a certainty then buying HBOS shares right now is effectively the exact same thing as buying Lloy at a huge discount to their current share price.

No I do understand and agree entirely with you. What I mean is that with the fluctuation in bank stocks, if they renegotiated the price, it may have to be done again and again. Who knows Lloyds might be worth £3.01 in the morning or next week.

Stebiz