Lloyds TSB May Face Rival Takeover Bid For HBOS

London, UK (AHN) - The authorities in the United Kingdom are looking for a rival bidder for the country's largest mortgage lender, HBOS Plc, just a day after business minister Peter Mandelson approved Lloyds TSB's takeover.

The reports said the government may be looking in to a potential rival bidder for the Halifax Bank of Scotland.

Scottish Secretary Jim Murphy is likely to hold talks with leading Scots financier Jim Spowart, the founder of Intelligent Finance, on the possible second bidder for the distressed financial firm.

The market analysts have indicated that the takeover of HBOS may cause negative impact on Scottish businesses and customers as the buyout could reduce the number of deals available for mortgages, retail accounts and insurance.

But the government on Friday overruled competition concerns raised by the Office of Fair Trading, giving Lloyds green light for the takeover of HBOS.

According to the Scotsman, Murphy said, "I have spoken to the Treasury and if there is a second serious bid then they (Treasury) would be happy to talk to them."

In the aftermath of Lehman Brothers Holding Inc and the Subprime mortgage contagion, HBOS has been looking to quickly consolidate its assets to preserve more capital.

But the possibility of second bid could lead to more delays in the merger between the two giants.

In septemberm Lloyds TSB had decided to takeover HBOS, which was struggling to raise capital and to shore up its financial statement amid declining credit conditions in global market.

The acquisition pact between the companies is worth 9.8 billion pounds (12.5 billion euros, 15.8 billion dollars), which is around 187 pence per share for HBOS.

Lloyds TSB currently expects that the acquisition and capital raising will be completed in January 2009.