Lloyds TSB Takeover Of HBOS In Jeopardy

Analysts said that Lloyds TSB shareholders were taking on a huge risk by buying HBOS and it would not be surprising if it once again tried to renegotiated better terms for the proposed takeover.

Monday's dramatic £37 billion cash injection into the banking system, orchestrated by Gordon Brown, has imposed "penal" terms on all the banks, especially Lloyds TSB.

Its shareholders have, for years, become accustomed to receiving generous dividends from the company. However, one of the conditions of receiving taxpayer money is that the banks cannot pay out dividends to their shareholders until the Government money has been repaid.

Those shareholders have every reason to feel they are getting a very unattractive deal.

The Treasury denied reports that it was making plans, behind the scenes, to step in and nationalise HBOS if Lloyds TSB walked away from the deal.