HBOS Priced at 280p

Online Stock Trading - HBOS LLOYDS Merger Price to be 232p not 280p

The BBC has just announced at 9 p.m. that the HBOS - Lloyds deal will be done at 232p not 280p as previously thought.

First of all let me (not Robert Peston) just say that IMHO until the authorities stop people selling shares they don't own, haven't borrowed and have no intention of borrowing this sort of mess will continue to happen. Capitalism is after all, all about making money for number 1, so even if n*k*d shorting isn't legal, if people can get away with it then they will continue to do it. It is in fact a logical consequence of the system in place.

The aim being to make money, it is clearly advisable to make money in the easiest way possible. It was inevitable that at some point driving companies to the wall would be seen as the easiest way of making money. For shorters, after all, the ideal result is when a company share price drops to zero and whatever they can do to get it to zero is the logical thing to do. This includes selling stuff they are not entitled to sell, working together in 'packs' as the BBC said, spreading false rumours etc...

Over on his blog Robert Peston has posted, re. the HBOS Lloyds deal:-

1. Price will be around 280p in shares (it turns ou t it was 232p) , - terms to be announced tomorrow morning before markets open. (Shorts to lose millions ? One can but hope - Ed.).
2. Gordon Brown will cite "national interest" clause in the law that led to the creation of competition authorities. But it may need to use secondary legislation.
3. The reason for all this is that people were beginning to withdraw cash from HBOS – so another Northern Rock could not be allowed.
4. The new larger group will still be subject to competition law. But a bit of realpolitik forced the government to protect depositors. (Perhaps the shorters were counting on the competition laws to prevent any merger ? – Ed.)
5. Scotland will be angry about the deal as the HBOS head office is in Scotland and the deal will relocate an important financial institution to London. But, strangely, Lloyds TSB's registered head office is in Glasgow.
6. Eric Daniels will remain CEO the new group. Andy Hornby’s future is not clear.

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