HBOS shares soar on hopes for Lloyds deal

Reuters - Wednesday, October 8 10:24 am

LONDON (Reuters) - Shares in HBOS soared more than 45 percent on Wednesday on relief that its acquisition by Lloyds TSB was on course, traders said.

At 10:11 a.m., HBOS shares were up 43.8 percent at 135.2 pence, easily the best performing share on the pan-European FTSEurofirst 300 . The benchmark slumped 5.2 percent, with only eight out of 312 shares advancing.

Bank shares were also supported by a government plan to inject up to 50 billion pounds into the sector.

"The market now believes that the deal is going to go through, and that is lifting HBOS shares," said one trader.

Earlier HBOS said the proposed acquisition by Lloyds TSB remained very much on track, and Lloyds said it continued to progress the proposed transaction.

HBOS investors are due to get 0.83 Lloyds shares for every HBOS share they own, implying a value of around 177 pence per HBOS share with Lloyds trading 5.4 percent lower at 213 pence.

(Reporting by Sitaraman Shankar, Dominic Lau and Steve Slater)

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