JUST as they thought the most controversial merger in UK banking history was finally done and dusted, Lloyds TSB and HBOS face yet more opposition to the deal.
Having overcome protests from high-profile Scottish businessmen, including Jim Spowart, Sir Peter Burt and Sir George Mathewson, and winning overwhelming support from shareholders in both HBOS and Lloyds, the banks could be forgiven for thinking not
hing could now stand in their way. Well, the end may now be in sight, but the fight isn't over yet.
The trustees of the HBOS pension fund will, on January 12, ask the Court of Session in Edinburgh to delay the deal until Lloyds offers better protection for the pension scheme. This move will cause further uncertainty that neither bank would have wanted.
But all the indications are that the worse-case scenario for Lloyds and HBOS would be for the merger's final legal sign-off to be delayed. It is in nobody's interests – including the pension scheme trustees and members – for the merger to be abandoned. The trustees realise this and have made it clear they "do not oppose" the deal "as such".
The priority now should be for the "super-bank" to finally get the new combined business up and running to help return some much-needed confidence to the entire market.
Glittering deals point to a brighter futureRETAILERS falling into administration, unemployment figures set to soar and economic recovery not looking likely any time soon. All the doom and gloom makes it hard to feel too optimistic about 2009, but there are some glimmers of hope starting to emerge.
As last year drew to a close, Scotland was given a welcome boost with the news that Aberdeen Asset Management (AAM) was buying the asset management arm of Credit Suisse in a deal worth £250m. The move makes AAM the UK's biggest publicly quoted fund manager. It showed that while other Scottish financial organisations struggle, at least one business is on the up.
The deal also shows how Martin Gilbert, chief executive of AAM, has helped the group recover from the split-capital investment trust crisis it was involved in earlier this decade. The Financial Services Authority referred to "split-caps" as the worst case of mis-selling it had come across and AAM was one of the fund managers whose reputation was badly hit by the debacle.
Now that Gilbert is clearly back on a winning track, he is unlikely to sit back and rest on his laurels following the Credit Suisse deal, given his acquisitive track record.
He has been behind a number of transformational deals. In the past year he has done five deals, ranging from buying a US mutual funds business to a UK real estate firm. All eyes will now be on what his next takeover target might be. There are certainly a number of bargains ready to be snapped up in the beleaguered market.
Gold is another bright spark on the horizon. It's still being seen as an attractive safe-haven investment and its value is expected to continue to increase. This will be good news for Scotgold Resources, the owner of Scotland's only gold mine, at Upper Tyndrum in Perthshire.
Scotgold estimates there are about 4.5 tonnes of gold and 20 tonnes of silver in the ground at the mine. Not a bad prospect given gold's current value of more than $870 an ounce. With mining expected to start in the next 18 months, Scotland may still have a golden future, despite the turmoil its financial system is going through.
Downturn takes shine off Hunter's assets SOMEONE who may face more turmoil in the coming months is Sir Tom Hunter. For years he has reaped enviable business success from his numerous ventures. From starting his career selling trainers from the back of van he became Scotland's richest man. He made around £250m when he sold his Sports Division chain to JJB Sports in 1998. But last week, things were not looking so good for Sir Tom whose interests are now being hit by the economic downturn. Just as the year drew to a close, USC, his high-street fashion chain went into administration. Although he has managed to salvage a number of the stores through a new company, questions will hang over parts of his investment company, West Coast Capital.
HBOS has backed many of his deals, but it remains to be seen whether Lloyds will have the same appetite to support Sir Tom's initiatives – when the merger finally goes ahead.
