HBOS shareholders to vote on takeover

This Friday (12 December) shareholders of Halifax Bank of Scotland (HBOS) will vote on the proposed takeover by Lloyds TSB.

Graham Spooner, investment adviser at The Share Centre, explains what the takeover could mean for investors.

"Lloyds TSB shareholders have already decided to back the takeover and we expect HBOS shareholders to do the same. In fact, we would be very shocked if the vote didn't get the nod. As far as we are concerned HBOS shareholders have no choice but to approve the vote. If the improbable were to happen there is no doubt HBOS' shares would plummet.

If, as expected, the vote does get the nod, shareholders are likely to see little benefit in the short term, apart from a sense of relief that the bank isn't going to fold. However, the new bank's long term prospects appear brighter, as it should benefit from its prominence on the high street and a greater market share.

We are currently advising investors to remain on the sidelines when it comes to banks. Investors considering purchasing Lloyds shares at present should remain cautious and consider their attitude to risk and time horizons before investing. However, our advice to investors is to wait and see what happens before investing their hard earned cash."