M&A: LTSB buyout of HBOS looking shaky?

With shares in both acquirer and target falling rapidly yesterday (HBOS by 20% and LTSB by 11%) some serious questions now face shareholders in both companies.

Is the price that Lloyds put up way over the price it should now pay?

And if it is, how will LTSB shareholders feel when they are asked to come up with the money instead of seeing a dividend?

And if LTSB shareholders insist on reducing the price, will HBOS shareholders accept a new offer, or will they look for someone else?

Of course, foreign banks have their own problems and as a result, the number of banks that could intervene is not high. Citbank was almost given Wachovia and as a result it's a bit busy now that Wells Fargo has decided to join that particular party. Tokyo Mitsubishi (etc.) is large and not too short of money but currently the Japanese government is telling banks that if they have any money, they should sit on their hands and not risk any of it. Asian memories are long enough to remember the last crisis, unlike those in the US and Europe, it seems.

Yesterday, Royal Bank of Scotland group (RBS) and Barclays (which is still on the acquisition trail around the world) were worth about half of their value a year ago. Both are now rumoured to be asking the UK government for capital injections.

If true, that must open some serious questions in relation to Barclays' recent spending spree - if it could afford Lehmann's US operations and a bank in Indonesia, why is the UK taxpayer being asked for funding?