HBOS sees share price rise on rumours of BBVA bid

by Gill Montia

Story link: HBOS sees share price rise on rumours of BBVA bid

HBOS saw its share price rise by more than 12% yesterday, on rumours that BBVA, Spain’s second largest bank, is contemplating a bid.

Earlier this week, HBOS suffered the indignity of gaining the support of only 8.29% of shareholders for its £4 billion fundraising.

Underwriters Morgan Stanley and Dresdner Kleinwort were left with around £3.5 billion worth of the group’s stock.

Following the launch of the cash call in April, the bank’s shares have plunged in value.

When the rights issue price was announced at 275p, it was heavily discounted against a share price of 500p.

Days before the rights issue closed, HBOS stock dipped to 228p as shares in British banks took an all-round pounding over concerns about the US and UK financial sectors.

A bid by BBVA would surprise analysts because the bank has been focused on expansion in Latin America, China and the US, where it has acquired four banks in the southern states.

According to news agency Reuters, at Wednesday’s prices, HBOS was worth around £15 billion, while BBVA was valued at £36.6 billion.