Merger of Lloyds TSB and HBOS

11 December 2008

Four members of Axiom have been involved this week in advising on the application made by the Merger Action Group ("MAG"), a Scottish pressure group, to the Competition Appeal Tribunal ("CAT"), seeking to overturn the decision by the Secretary of State for Business, Enterprise and Regulatory Reform not to refer to the Competition Commission the proposed merger between Lloyds TSB and HBOS. 

Following the Secretary of State's decision on 31 October 2008, the merger is set to proceed, and indeed HBOS shareholders are due to gather in Birmingham tomorrow, 12th December, to vote on the deal.  However, MAG appealed to the CAT, arguing that the Secretary of State's decision had been unlawfully pre-ordained by the government, and that the decision in any event contained language showing that the decision maker had been fettered. 

A hearing was held in London on 8-9 December in which the banks were permitted to intervene.  James McNeill QC and James Mure were retained by Lloyds TSB to advise on the Scottish aspects of the case, which could have been further appealed to the Court of Session in Edinburgh.  Alistair Clark QC similarly advised HBOS, while Mark Lindsay advised the Secretary of State as junior counsel to the Advocate General for Scotland. The decision of the CAT was firmly in favour of the Secretary of State and the banks, holding that the challenge by MAG to the decision making process was "unsustainable": see [2008] CAT 36.  MAG has decided not to appeal further.

http://www.catribunal.org.uk/documents/Judg_1107_MAG_101208.pdf