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Approval for Lloyds TSB-HBOS merger

Lloyds TSB shareholders overwhelmingly backed the bank's rescue takeover of ailing rival Halifax Bank of Scotland (HBOS). They voted 96% in favour of the controversial deal at the Lloyds TSB Group general meeting in Glasgow. They also backed plans to raise a total of £5.5 billion through the issue of new shares and special preference shares to strengthen Lloyds' balance sheet.

Both Lloyds and HBOS - whose shareholders will vote on the proposed merger next month - said the vote was a "milestone" for the deal.
Competition rules have been waived to allow the merger, which is expected to be completed by January 2009. If it gets the go-ahead, it will create a banking giant with around 145,000 staff and 3,000 branches across the UK.

The majority of the 372 shareholders at the meeting cast their vote electronically, while the remainder cast a paper vote. These were added to the thousands of those who cast their vote by proxy.

Speaking after the vote, Lloyds TSB chairman Sir Victor Blank said it was an "important milestone".

"This is overwhelming endorsement for the logic of this transaction," he added.

An HBOS spokesman said: "We welcome today's overwhelming vote by Lloyds TSB shareholders in favour of the acquisition. The vote represents another very important milestone for the deal."

During the meeting, which lasted just under three hours, Sir Victor told shareholders: "We do appreciate that many of our employees may feel apprehensive at this time but, in creating what we believe will be the UK's leading financial services company, we believe the combination will generally provide enhanced opportunities for those who work in our group."

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