Grandees' plot given short shrift by HBOS

Three of HBOS's biggest shareholders today dismissed the plan by two former leading Scottish bankers to scupper its £6 billion takeover by Lloyds TSB.

Sir George Mathewson, former chairman of Royal Bank of Scotland, and Sir Peter Burt, former chief executive of Bank of Scotland who oversaw its merger with Halifax, wrote to HBOS on Saturday with plans to keep the bank independent.

But today they were rebuffed by HBOS and dismissed by three of its top 10 shareholders. The latter refused to be named, but one said: "They don't stand a cat in hell's chance. There is absolutely no interest in the proposal. This is entirely designed to pacify the Scottish lobby and show that they have tried."

A letter made public today from the HBOS board, headed by Lord Stevenson, said the Burt-Mathewson move had been rejected. It accused the pair of having no real "alternative plan" and continued: "You do not describe any specific aspect whatsoever of this plan. Nor do you set out a value proposition for shareholders, or address how your idea would provide certainty of stability for HBOS."

Santander, owner of the Abbey bank in the UK, today raised $9.2 billion in a surprise rights issue to boost its capital levels. The Spain-based banking giant appears to be strengthening itself in readiness for a global economic downturn.