The Lloyds-HBOS tie-up was arguably the worst merger in UK corporate history. It was inspired by New Labour, who were anxious to avoid a second banking collapse after Northern Rock. The Lloyds bank management agreed to it because they thought they could dominate the retail lending business in the UK.
It was tawdry deal that went badly wrong; Lloyds management thought they were going to monopolise the market. Instead, the bank nearly sank under the bad loans they took over from HBOS. The government ended up owning almost half the bank.
The shareholders were misled, and suffered huge financial losses. Now, the UK Shareholders’ Association (UKSA) is taking legal advice over the circumstances surrounding the deal. They hope to launch a legal campaign against the directors of Lloyds TSB over their decision to rescue HBOS.
But why hit the monkey when you can clobber the organ-grinder. Lloyds shareholders should sue the government.