The Share Centre: Lloyds TSB and HBOS merger

Commenting on the planned £12.2bn takeover of Lloyds TSB and Halifax Bank of Scotland (HBOS), Graham Spooner, Investment Adviser at The Share Centre, said: "The merger between Lloyds TSB and HBOS should help bring some much needed stability to the financial sector, and will no doubt alleviate fears of a collapse for HBOS shareholders. We also expect the deal to improve confidence among customers and investors in the UK financial sector."

HBOS lost half its market value in the past week but today, on the back of the announcement, shares in Britain's biggest mortgage lender rose 54 per cent to 227 pence. And Lloyds TSB shares have risen 18 pence to 300 pence.

Investors are being offered 0.83 of a Lloyds TSB share for every one HBOS share owned. Spooner said: "Going forward, we hope that after this period of volatility, the merger will create a powerful entity on the high street and offer some long-term value for investors. However, those considering purchasing Lloyds shares at present should remain cautious and consider their attitude to risk and time horizons before investing."