Lloyds shareholders lose legal challenge over HBOS merger

Almost 6,000 Lloyds shareholders have failed in a multi-million-pound legal challenge against the bank’s takeover of HBOS.

The shareholders had claimed they were “mugged” when Lloyds recommended the deal in 2009 without disclosing the true financial state of HBOS.

They argued that if they had been given essential financial details they would not have backed the deal and that they had lost money as a result.

As the scale of HBOS’s loan losses emerged after the merger, British taxpayers were forced to pump in more than £20bn to keep the combined entity afloat.

During the hearing at the High Court in London, a lawyer for the shareholders said the directors had recommended the “disastrous” acquisition but, based on the information they had, no reasonable director would have done so.

But a lawyer for Lloyds had said the shareholders’ claims were “entirely devoid of merit” and “fundamentally flawed at every level”.

Lloyds said that the shareholders were seeking losses of between £200m and £650m but insisted they had “in fact suffered no loss as a result of the matters they allege”.

More from Lloyds

After the decision was handed down, a Lloyds Banking Group spokeswoman said: “The group welcomes the court’s decision.

“Throughout this process, the group has sought to act in the interests of our shareholders as a whole.”

Damon Parker, founder and partner of law firm Harcus Parker, which represents 300 institutions and thousands of individuals in the case, said: “Our clients are deeply disappointed by today’s judgement.

“They wish to assess their options and will be considering whether to appeal.”

Let’s block ads! (Why?)

Business News – Markets reports and financial news from Sky

Leave a Reply

Your email address will not be published. Required fields are marked *