WHEN the full story of this financial era comes to be written they will have to devote a whole chapter to the takeover of HBOS and the band of freedom fighters who continue to fight for its independence.
Never in the realms of acquisition history can there have been so many opposition campaigns, from Jim Spowart's "bidder" and the pairing of two banking knights Peter Burt and George Mathewson, to the latest move by a group of financiers awaiting
a tribunal hearing on competition grounds.
Sadly, they've all put too much of a premium on seeing the bank remain independent for what seems like independence sake, and in doing so they threaten to destabilise HBOS and sentence it to a potentially worse fate.
While Spowart was linked to a Bank of China takeover, he refused to confirm his partner's identity. The fact that the shares in HBOS hardly responded to the continuing speculation told us that the City gave the proposition little credence. Had there been a spike in the shares, no doubt the Takeover Panel would have forced Spowart to "put up or shut up". He chose to shut up.
Burt and Mathewson had no financial backing, though in the latter days of their intervention they were in talks with somebody. However, the £500m funding gap that they identified in the required state aid package was simply a mis-reading of the government's position.
Chancellor Alistair Darling made it clear that the aid package was non-negotiable. Even if the treasury had got round the table to discuss new terms, they would have been considerably worse given that the financial crisis has deepened since the original deal was thrashed out in mid-October.
What's more Burt and Mathewson, like this latest group of adventurers, led by the architect Malcolm Fraser, would struggle to manage a bank with liabilities in excess of £670bn. It's a whopper of a problem that the government balked at when full nationalisation was proposed. And it clearly sent a cold shiver down the spines of the Chinese bankers who were quick to distance themselves from HBOS despite the golden opportunity it gave them to get a foothold in the western financial system.
I've said it before and will keep repeating it: HBOS was heading for the knacker's yard without Lloyds TSB or some other willing partner taking it on. While Lloyds' management talks about the deal of the century, they also know they are taking a bit of a gamble.
For those who instinctively object to this deal because it's from an English bank - and there are a lot of dangerous people in that camp - should remember that Lloyds has significant roots in Scotland - it is registered north of the border and the TSB bit - often overlooked - is very Scottish. So are the 7,000 jobs that Lloyds already employs in Scotland.
It's time to draw a line under all this. HBOS will pass into history after the shareholder vote on December 12, but banking will not die in Scotland. Remember, the new Lloyds Banking Group has been described as a superbank. And superbanks have a habit of being quite influential if they're run properly. In a new era of caution and responsibility Lloyds Banking Group has every chance of providing Scotland with a solid stake in the future.
Terry Murden is Business and City Editor of Scotland on Sunday
