Lawyers have argued that Lloyds Banking Group (LON:LLOY) exposed its shareholders to ‘colossal risk’ by buying ailing rival HBOS at the height of the financial crisis, The Telegraph has reported. The comments came amid an ongoing trial, with shareholders suing the bailed-out lender over the disastrous acquisition, which was subsequently followed by a taxpayer-funded rescue.
Lloyds’ share price has fallen into the red in London in today’s session, having given up 0.73 percent to 68.30p, largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.60 percent lower at 7,188.70 points. The group’s shares have added about 0.15 percent to their value over the past year, as compared with more than a two-percent drop in the Footsie.
High Court trial continues
The Telegraph reported yesterday that Richard Hill QC had told the High Court that it was ‘not acceptable’ for Lloyds to have recommended the HBOS takeover to investors given what it knew about its financial woes. He further criticised the bailed-out lender for being ‘unapologetic’ about the losses shouldered by investors on the stock allegedly as a result of the deal.
The newspaper meanwhile notes that according to court papers, the bailed-out lender is set to argue that the investors’ claim is ‘entirely devoid of merit’ and that its former bosses acted in the best interests of shareholders.
Analysts on bailed-out bank
Beaufort Securities reiterated its ‘buy’ rating on Lloyds last month, following the group’s full-year results, valuing the shares at 80p, while JPMorgan Chase & Co continues to see the company as an ‘overweight,’ with a price target of 85p on the shares. According to MarketBeat, the bailed-out lender currently has a consensus ‘hold’ rating and an average price target of 75.97p.