UPDATE 2-HBOS investors unconvinced by ex-bank chiefs' plan
* Top investor says no interest in proposal
* Pair to hold talks with shareholders
* SLI to listen to proposal
(Adds details, Mathewson comments, background)
LONDON, Nov 10 (Reuters) - Some investors in UK lender HBOS HBOS.L on Monday dismissed an attempt by two Scottish bankers to derail HBOS' merger with Lloyds TSB (LLOY.L), as one of the pair said it was pursuing talks with the bank's shareholders.
At the weekend the duo, George Mathewson and Peter Burt, proposed that they take temporary management control of HBOS and explore alternatives to the Lloyds TSB takeover.
Burt was chief executive of Bank of Scotland (RBS.L) when it merged with Halifax to form HBOS in 2001. Mathewson was previously chief executive and then chairman of RBS.
Mathewson told Reuters on Monday that discussions with HBOS shareholders were planned in the days ahead, arguing that the Lloyds deal would restrict competition while closing off alternative options that could deliver more value to HBOS shareholders.
But three of HBOS' ten biggest shareholders, who asked not to be named, told Reuters that Mathewson and Burt's approach stood little chance of success.
"They don't stand a cat in hell's chance. There is absolutely no interest (in the proposal). This is entirely designed to pacify the Scottish lobby and show that they have tried. It's a joke," one of the investors said.
The Scottish pair need to win the support of 10 percent of HBOS investors to call an extraordinary general meeting to vote on their proposal.
GOING IT ALONE?
In September the government waived competition rules to facilitate Lloyds' takeover of HBOS, amid concerns at the time that HBOS could fail due to confidence-sapping falls in its share price.
The deal, in which HBOS investors would receive 0.605 Lloyds shares for every HBOS share they own, would create a lender controlling one quarter of the UK current accounts and 28 percent of the country's mortgage market. Continued...
