Q4.
A4.
Surely allowing Lloyds to acquire shares at this stage creates further uncertainty for Midland?
The President's concern when considering Lloyds' request was whether an acquisition of a shareholding of this size would give Lloyds material influence over Midland or prejudice the outcome of the MC's current investigation
He was satisfied into a possible merger of two banks. that it did neither of these things.
It must be for
Midland's shareholders to decide whether to sell any
shares to Lloyds and its associates.
Q5. Will Lloyds have to sell any shares it acquires if the
MMC reach an adverse finding following their investigation of the bank's proposed acquisition of Midland?
A5.
Q6.
No.
The President is satisfied that a shareholding limited to less than 10% of Midland's share capital would not give Lloyds material influence over Midland and would not be above a level to which divestment is normally required following an adverse report by the HMC (eg following the MMC's report on BP/KIO).
What happens if Hong Kong and Shanghai Bank gains control of Midland?
A6.
Lloyds could choose to remain a shareholder, subject to the provisions of the Companies Act 1985 which give an offeror the right to buy out a minority shareholder in
[If pressed] HKSB would certain circumstances. essentially need to secure acceptances representing 90% of Midland's total share capital in order to require Lloyds to sell its shares.
700
CADIMOD NOLIDWO) (10
99:60
26/90/50
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