Lloyds TSB investors overwhelmingly backed its takeover of HBOS and a government bailout plan on Wednesday.
More than 96% of Lloyds shareholders supported votes on the takeover, the issue of new shares under the fundraising plans and six other resolutions, based on preliminary numbers from the bank. A small number of votes made at the venue need to be included for a final tally. Most of the votes only needed majority approval.
Approval of the deal had been widely expected. By 2:12 p.m. Lloyds shares were down 0.9% at 130 pence. HBOS shares were up 12.4% at 70.3p, clawing back recent losses but still below the 78.7p implied value of the Lloyds offer. The bank’s executives were earlier expected to face a grilling from unions about the potential for up to 50,000 job cuts at the meeting, however.
Lloyds TSB Group Union, which represents over 40,000 staff, said before the meeting it wanted clarity on the scale of job cuts from the creation of the enlarged Lloyds Banking Group. It wants executives to limit compulsory redundancies and end the offshoring of jobs to India to limit the impact. “We’re talking about £1.5 billion ($2.28 billion) of cost savings and I’ve seen analysts talking about anything from 20,000 to 50,000 jobs losses,” Steve Tatlow, LTU assistant general secretary, told Reuters. “So far the bank hasn’t confirmed any figures, it’s chosen not to get into any debate about how many job reductions it’s going to lead to,” he said.
The union planned to lobby shareholders as they enter the meeting in Glasgow. Lloyds and HBOS employ 145,000 staff between them. Lloyds expects the takeover to save £1.5 billion a year by 2011, largely through thousands of job cuts. Lloyds agreed to buy HBOS in September in a government brokered deal after HBOS’s share price was ravaged by concern about its health as the credit crisis deepened.
The banks are due to receive a combined £17 billion under a government recapitalization plan agreed last month. Chancellor Alistair Darling warned any renegotiation of that package would be far more costly for banks than the original terms, putting pressure on investors to agree the deal. HBOS investors are due to vote on December 12, and the deal is expected to complete in mid-January. (Reuters)