Reports in this weekends press suggest that only around 10% of HBOS shareholders participated in the banks rights issue to raise £4billion.
Experts are concerned that the take up may be so bad that it will leave underwriters Morgan Stanley & Dresdner with as much as £3.6bn worth of the banks stock.
HBOS had hoped to rally support from it’s estimated 800,000 small private investors who were given around 200 shares each following the demutualisation of Halifax Building Society ten years ago.
While the offer made by HBOS may have looked attractive when it was announced in April, since then the share price has plunged in value. The hammering taken last week as UK banks in general were hit on the stock exchange, saw HBOS share drop to a low of 228p against the original discounted rights issue price of 275p.
The next few days could be crucial for the bank and it will be interesting to see how experts Morgan Stanley & Dresdner emerge from the farce.
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