Lloyds TSB renegotiates HBOS deal

LONDON (Reuters) - Lloyds TSB (LLOY.L: Quote, Profile, Research) said it has renegotiated its agreed takeover of rival HBOS (HBOS.L: Quote, Profile, Research) as both banks unveiled plans to accept government money to bolster their finances.

HBOS investors will now receive 0.605 Lloyds shares for every HBOS share they hold, Lloyds said in a statement on Monday.

Under the terms of the original offer, unveiled on September 18, they would have received 0.833 Lloyds shares per HBOS share.

The two lenders also revealed plans to raise a combined 17 billion pounds under a government-funded recapitalisation programme aimed at strengthening the UK banking sector's capital reserves.

The government will own up to 43.5 percent of the combined group, HBOS said.

(Reporting by Myles Neligan, editing by Will Waterman)