HBOS auctions Hill Hire business

by Gill Montia

Story link: HBOS auctions Hill Hire business

Last week HBOS was at the centre of rumours that it has become a takeover target, and the group has been in the news again over the weekend.

According to a report in the Sunday Times, HBOS is attempting to raise £300 million from the sale of its Hill Hire subsidiary.

The business, which is based in Bradford, is one of the UK’s biggest vehicle hire companies, operating a fleet of around 21,000 vehicles from 17 depots.

Since its acquisition by HBOS in 1999, the business has grown substantially and customers include J Sainsbury, Tesco and DHL.

HBOS is saying that the proposed sale is a matter of routine and not an attempt to raise capital to offset credit crisis losses.

Last week, the bank completed a £4 billion fundraising but revealed that only 8.29% of its shareholders engaged with the right issue.

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

HBOS described the outcome as satisfactory because it raised the capital needed to bolster its Tier one ratio.

However, the group’s Halifax business is the UK’s largest mortgage lender and the credit crisis has left HBOS exposed in both the UK residential and commercial property markets.