Who Told Peston?

September 17th, 2008

If as many suspect the Treasury panicked and tipped Peston off about the HBOS bid in order to stem the collapse we could be looking at serious consequences.

This is a clear breach of the Take Over Code:

2.2 WHEN AN ANNOUNCEMENT IS REQUIRED

An announcement is required:—

… when, following an approach to the offeree company, the offeree company is the subject of rumour and speculation or there is an untoward movement in its share price;

when, before an approach has been made, the offeree company is the subject of rumour and speculation or there is an untoward movement in its share price and there are reasonable grounds for concluding that it is the potential offeror’s actions (whether through inadequate security or otherwise) which have led to the situation

It is doubly serious, because he said the price would be near £3, then said it would be nearer £2, millions have changed hands on the basis of false information…

UPDATE : Informed City co-conspirator emails

What is more significant is the fact that at least one city law firm is in the early stages of rounding up plaintiffs among the fund community for an action relating to the price manipulation of HBOS shares this morning.

Peston admitted “over-egging” the price while the panel stood by and the companies made no announcements. No suspension of trading either.

Funds who sustained losses stopping out short positions entered at around 180 – the key level that broke down on volume over the past couple of days, will be placing the blame fairly and squarely with the entirely false idea given cynically to retail punters by the bbc that the price would be set around the 300p level.

This is going to get very interesting indeed.

UPDATE : Peston now says on his blog “I am hearing that this deal has been negotiated at a very high pay grade level, with the Prime Minister, Gordon Brown, talking to Sir Victor Blank, chairman of Lloyds TSB, about how helpful it would be if Sir Victor could bring himself to end the uncertainty hanging over HBOS by buying it.” He also says the deal is an all share deal which, wait for it, will be worth near £3!

UPDATE II : Have just been reminded that Peston wrote Brown’s biography Brown’s Britain.