HBOS rejects Scottish ex-bank chiefs bid

By Jodie Ginsberg and Steve Slater

LONDON (Reuters) - Britain's biggest home lender HBOS rejected on Saturday a proposal from the former heads of Royal Bank of Scotland and Bank of Scotland to block its government-brokered takeover by Lloyds TSB.

Peter Burt and George Mathewson want to step in to replace the current HBOS chief executive and chairman, the BBC said, and believe the bank can survive as a stand-alone business now the government has moved to recapitalise banks.

HBOS confirmed it had received a letter from the two men but said it contained no concrete proposals.

HBOS spokesman Shane O'Riordain said late on Saturday: "We have written back to messrs Burt and Mathewson (and told them) the board has unanimously concluded that your letter does not form the basis for any further discussions between us."

Burt was chief executive of Bank of Scotland when it merged with Halifax to form HBOS in 2001. Mathewson was previously chief executive and then chairman of RBS.

"It is our intention to create a detailed alternative plan that we believe will represent better value for both the HBOS shareholders and stakeholders alike by keeping HBOS as an independent bank," the BBC quotes the letter as saying.

"We note that the letter does not contain any alternative proposal or a substantive bid for HBOS," O'Riordain said earlier.

The letter did not address the funding issues that all major banks are currently seeking to manage, he added.