The revised terms agreed include HBOS shareholders would receive 0.605 Lloyds TSB shares for every one HBOS share. At the same time, an offer would also be made to HM Treasury for exchanging the preference shares it holds in HBOS to an equivalent amount of shares in Lloyds TSB, the company said in a filing to the London Stock Exchange.

The takeover panel has given its consent to the revision of terms.

In addition, 17 billion pound of capital would be raised, of which 11.5 billion pound (8.5 billion pound in ordinary shares and three billion pound in preference shares) would be raised by HBOS and 5.5 billion pound (4.5 billion pound in ordinary shares and one billion pound in preference shares) by Lloyds TSB, it added.

The equity capital being raised by Lloyds TSB comprises a subscription by HM Treasury of around 2.6 billion new ordinary shares at 173.3 pence per share, representing an 8.5 per cent discount to Lloyds TSB's closing price on 10 October 2008 and raising about 4.5 billion pound in aggregate.

Lloyds TSB shareholders would be given the opportunity to claw back their proportionate entitlement to these new Lloyds TSB shares through an open offer, the timing of which would be announced later.