HBOS shares continue to lose value, with the markets apparently expecting the takeover deal to be amended.
Concerns are growing in the City over the financial viability of Lloyds TSB's takeover of HBOS.
The government-backed £12.2 billion deal was announced last month, after HBOS stock fell sharply as investors became concerned over the firm's financial position.
Since the takeover was announced, however, the lender's shares have not rallied as was initially expected - but have continued to fall due to the ongoing global financial turmoil.
On the FTSE yesterday, HBOS stock closed ten percent down on the day - a clear sign that investor confidence in the firm has been badly affected. In turn, this might cause Lloyds TSB to renegotiate the deal's price.
Speaking to the Press Association, Collins Stewart banking analyst Alex Potter said: "The market is implying that [the deal] does not happen." Numis Securities analyst Gurgit Kambo also detected "some concerns" over the takeover - citing the fact that Lloyds TSB shareholders still have to vote on the deal for it to go through.
Responding to the rumours, an HBOS spokesman commented: "This is the right deal for HBOS shareholders. We are already working on the integration planning process and it is full steam ahead as far as we are concerned."
He added: "Share price volatility in bank stocks is part of the menu at the moment. These are not normal times."
Prime minister Gordon Brown also indicated yesterday that he was confident the deal would go ahead.
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