In a letter to shareholders that formed part of the acquisition circular, HBOS chairman Lord Stevenson wrote of the consequences of a failed Lloyds TSB takeover, “HBOS would be required to raise capital in order to meet FSA requirements in circumstances where there can be no certainty as to the amount that would be required or whether HBOS would be able to successfully raise such capital.”

In fact, the circular makes it clear that without the deal, HBOS may lose its, “independent or private sector status,” as it could be forced to turn to the Treasury for the £11.5billion required by the FSA.

As the completion of the Lloyds HBOS deal becomes closer, the acquisition has met some opposition, the most high profile of which came from ex-banking chiefs Sir Peter Burt and Sir George Mathewson who claimed they should take the helm at HBOS and it should remain independent.

However, the opposition was quickly dismissed by HBOS, as no real alternative to the Lloyds TSB takeover was proposed and, as it has been seen in the circular, without Lloyds TSB, HBOS could be forced into nationalisation.

Another campaigner for the independence of HBOS has been financier and former HBOS executive Jim Spowart, who, according to reports, conceded yesterday as his campaigns and alternatives failed to gain the political support required.

The all important vote over the Lloyds TSB HBOS takeover will take place on December 12th.

© Fair Investment Company Ltd