LLOYDS TSB GROUP-LLOYDS ABBEY LIFE: AGREEMENT IN PRINCIPLE
In view of heightened market speculation, Lloyds TSB Group and Lloyds Abbey Life announce that they have agreed in principle the terms of a proposal under which Lloyds Abbey Life would become a wholly owned subsidiary of Lloyds TSB Group.
Under the proposal Lloyds Abbey Life minority shareholders would receive six Lloyds TSB Group ordinary shares for every seven Lloyds Abbey Life shares held plus 300p in cash for every Lloyds Abbey Life share.
It is expected that about 50p net of the 300p cash consideration per Lloyds Abbey Life share would be made available by way of a special dividend of Lloyds Abbey Life.
On the basis of yesterday's Lloyds TSB Group closing price, this proposal would value each Lloyds Abbey Life share at 635p, excluding the ACT credit on any special dividend. Shareholders in Lloyds Abbey Life will be given the ability to receive cash in respect of half their entitlement to Lloyds TSB Group ordinary shares.
Both parties believe that the proposal would be in the best interests of customers, staff and shareholders. The proposal would be effected by a scheme of arrangement between Lloyds Abbey Life and its minority shareholders.
It is expected that an announcement containing full details of the proposal will be made early next week.
SOURCE Lloyds TSB
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