An appeal by a group of HBOS shareholders against the bank's proposed merger with Lloyds TSB has been thrown out by the Competition Appeal Tribunal.
While the Tribunal acknowledges the Government had been categorical in outlining its preference for the deal, it was dismissive of the Merger Action Group's claims that Lord Mandelson had made the decision to approve the deal effectively at the dictation of other senior members of the Government.
The judgement concludes: "There is simply no basis for the allegation that the issue of the continuing need for the merger was not properly considered by the decision-maker. Nor is there any substance in the claim that the Secretary of State wrongly took account of the views of the FSA on the competitive strength of HBoS in preference to the position of the OFT, or failed to have regard to the Commission's latest position on state aid.
"It follows that these points, whether under a label of irrationality or failure to take account of relevant considerations or some other label, also fail."
Commenting on the ruling, Roger Lawson, communications director at the UK Shareholders Association (UKSA), says: "While none of our members are specifically part of that group, a large number of them did support the action."
UKSA members who held shares in Northern Rock will be hoping for more success with their impending Court challenge over compensation caused by nationalisation. Earlier in the year the association submitted an application for a judicial review into the terms of the bank's nationalisation on behalf of 15 plaintiffs who were former shareholders with Northern Rock.
Commenting on the review, which will be held in Court on 13 January, Lawson reveals: "There will be a public demonstration outside the court and it will be a good old media circus.
"Obviously Bradford & Bingley (B&B) shareholders will keep a close eye on the outcome because the decision made there will set precedent. Any ruling will then apply to B&B shareholders who are also fighting for improved compensation for their shares."IFAonline
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