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Insurance industry

Lloyds TSB Confident in Scottish Widows Bid

Strategic Insights

— 1 min read

Lloyds TSB chief executive PETER Ellwood expressed confidence that the bank's $7 billion offer for Scottish Widows would not be topped by any rival bidder. Ellwood highlighted the benefits of the deal, which includes giving Scottish Widows' products access to 15 million customers, roughly one in four of the British population. He also refused to rule out a bid for the Royal Bank of Scotland group, suggesting that Lloyds would evaluate every commercial option.

As part of the deal, Lloyds would gain Scottish Widows' 5.1% stake in RBS, significantly expanding its network. The combined group would have 2,500 branches, making it the largest financial institution in the UK. Despite certain hurdles to be cleared, Ellwood remains optimistic that the deal will be completed, with a circular on the offer set to be sent to Scottish Widows policyholders in August or September.

Key Takeaways:

  • Lloyds TSB is confident that its $7 billion offer for Scottish Widows will not be topped by any rival bidder, with CEO PETER Ellwood citing the deal's benefits, including access to 15 million customers.
  • The deal would give Lloyds a significant stake in RBS, making it a major player in the UK's banking industry.
  • The combined group would have 2,500 branches, making it the largest financial institution in the UK by a long way.
  • A circular on the deal will be sent to Scottish Widows policyholders in August or September, followed by a special meeting in November.
  • If policyholders vote to approve the takeover, it will go ahead in the first quarter of 2000.
  • Lloyds TSB's share price is not a concern, according to Ellwood, as the deal is revenue-driven rather than cost-cutting.
  • Junior executives from Lloyds and Scottish Widows are already meeting to make the deal work.

Statistics:

  • $7 billion: the value of Lloyds TSB's offer for Scottish Widows.
  • 15 million: the number of customers who would have access to Scottish Widows' products as part of the deal.
  • 5.1%: Scottish Widows' stake in RBS that would be gained by Lloyds.
  • 2,500: the number of branches the combined group would have.
  • August/September: the months in which a circular on the deal will be sent to Scottish Widows policyholders.
  • November: the month in which a special meeting will be held to discuss the deal.

Sources:

  • The Scotsman
  • Edinburgh Chamber of Commerce and Enterprise
  • Lloyds TSB group
  • Scottish Widows

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