HBOS Shares Surge

Shares in troubled HBOS leapt almost 18% Thursday amid mounting confidence its proposed takeover with Lloyds TSB will go ahead.

HBOS declined to comment on a report that Commonwealth Bank of Australia has offered to buy its Australian business BankWest. CBA also declined comment, but analysts said the banks are likely to be in talks.

HBOS shares had traded at a 35 percent discount to the proposed Lloyds' offer this week as fears mounted that shareholders may not approve the deal or Lloyds could revise terms, but the shares have rallied and the discount narrowed as investors said they backed the deal.

At 11am BST HBOS shares were up nearly 18% to 174.20.