HBoS was today leading a surge in stock market confidence as belief grows among investors that the takeover by Lloyds TSB will go ahead.
The Edinburgh-based bank had seen its shares nosedive amid concerns that the deal would have to be renegotiated.
But growing investor belief in the deal, together with market gains in the wake of the US Senate approving the £396 billion rescue pa
ckage, led to HBoS shares rising by 13 per cent to 168p shortly after 1pm today.
Anthony Bolton, a fund manager at investment firm Fidelity, which has a two per cent stake in HBoS and Lloyds, said: "My personal view on this is that it will succeed and it will go through on the original terms, and I think most parties would like it to succeed on that basis.
"I think it'll be a very good thing for the banking market generally in the UK and I think the combined company will be an attractive investment."
Banks dominated the FTSE 100 Index risers following the US Senate's approval for the bail-out package last night, although the deal still requires approval in the House of Representatives tomorrow.
Despite HBoS's strong gains, it is still trading at a 20 per cent discount to the Lloyds TSB offer of 0.833 per cent of its shares for every HBOS share – although this gap has narrowed since Tuesday.
Lloyds TSB was up seven per cent at 1pm today, with Barclays and Royal Bank of Scotland also showing gains of three per cent or more.
The full article contains 269 words and appears in Edinburgh Evening News newspaper.
