HBOS is expected to reveal today that as few as 10 per cent of its shareholders took part in its troubled £4 billion rights issue.
A take-up at that level – predicted by some observers last night – would represent one of the City's least successful cash calls.
The result would saddle underwriters Morgan Stanley and Dresdner with around £3.6bn worth of shares. Disposing of t
hat amount of HBOS stock could further hit the Edinburgh-based bank's share price.
HBOS last night refused to confirm the likely scale of the rights issue – or even formally say that the announcement would be today.
A 10 per cent take-up would compare with failed BP's £7bn issue scheme, which left big City backers owning most of the shares after the stock market crash of October 1987. And it would compare unfavourably with Barclays, which won 19 per cent support in its recent £4.5bn share placing.
Rival Royal Bank of Scotland raised £12bn earlier this year through a rights issue backed by more than 95 per cent of investors.
Many of HBOS's two million small investors – who own around 27 per cent of the bank – are thought to have turned their back on the rights issue. The cash call was launched in April to help strengthen the group's balance sheet.
The underwriters are likely to spend several days trying to place the shares with big City investors, accepting any taken up on to their own balance sheets until they can sell them for a profit.
The full article contains 264 words and appears in The Scotsman newspaper.
