The bank HBOS, has announced debts of £ 8 billion, rising from £3 billion before the voting commenced from their shareholders, with regards to its acquisition of the Lloyds TSB bank. The announcement the HBOS shares dropping down to just 73.4p and contributing to the FTSE plummeting.

Voters speak out

Some 84 per cent of individual shareholders voted in favour of the merger, representing 98 per cent by the value of shares voted. The merger would see the bank owning more almost 30 per cent of mortgages in the UK.

The Interim Management Statement from HBOS highlights the present negative situation that the banking group is currently in, which could help to secure shareholder votes in favour of the Lloyds TSB acquisition to enable the bank to gain some finances.

Despite appeals being thrown out by the competition tribunal, the gloomy statement released by HBOS aimed to convince opponents to the merger that without it, HBOS would be in an exceptionally weak position.

The statement also includes content based on how the merger and the Government’s intervention could save HBOS from inevitable failure, stating: "UK recession and increasing unemployment will continue to present a particularly challenging operating and credit environment.

However, the injection of capital and liquidity facilitated by the UK Government, both currently and going forward, HBOS remains confident in its ability to navigate through this difficult period, as it becomes part of the enlarged Lloyds Banking Group.

Further commenting on the merger, Graham Spooner an investment advisor at The Share Centre, said: "We would be very shocked if the vote didn't get the nod. As far as we are concerned HBOS shareholders have no choice but to approve the vote."

Mr Spooner added optimistically that: "If, as expected, the vote does get the nod, shareholders are likely to see little benefit in the short term, apart from a sense of relief that the bank isn't going to fold. However, the new bank's long term prospects appear brighter, as it should benefit from its prominence on the high street and greater market share."

Appeals from the appalled

The proposed merger between HBOS and Lloyd TSB had been given the go ahead by the Government, after competition rules over looked to allow Lloyds TSB to rescue HBOS. An appeal against this was made by the Merger Action Group, (MAG) a group that involves customers, shareholders, employees and businessmen who believed that HBOS could survive on its own.

The appeal from MAG against the waiver of competition rules however, was overturned by the Competition Appeal Tribunal (CAT), which did allow the Lloyds TSB and HBOS merger to continue.

A large number of people and organisations were against the plans for the merger, particularly many from Scottish business people who believed that HBOS should remain independent.

MAG is a collaboration of former and current staff, customers and business people who, according to a statement, are still considering appealing the decision of the Competition Appeal Tribunal, despite the group's arguments being dismissed as having no 'substance'.

An MAG spokesperson Malcolm Fraser said: "We will now be having intensive meetings with our legal team regarding a possible appeal to the findings of the tribunal. It remains our belief, shared by many, that allowing this proposed merger to go forward without due, and proper consideration by the Competition Commission, sets a dangerous precedent."