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Lloyds shares surge in takeover talks

Shares in bank Lloyds TSB have soared to a three-and-a-half year high after rumours of a possible takeover bid surfaced.

Fresh speculation that potential bidders in both the United States and Europe were poised to make a play for the high street bank boosted the company's FTSE 100 performance.

Shares soared by almost nine per cent, from 45.5p to 555p, as speculation grew that the company was expecting an offer, according to Bloomberg.

Lloyds TSB is the UK's fifth-largest bank by assets and a report in the Financial Times suggested that there had been talk about the company receiving an offer of 700p per share from a US bank, rumoured to be Wells Fargo or Bank of America.

Meanwhile, an article in the Guardian has suggested that Spanish banking giant Banco Bilbao Vizcaya Argentaria is poised to submit a bid for the London bank. Lloyds has refused to comment on the speculation.

Credit Suisse analyst Jonathan Pierce told Bloomberg: "It's just a continuation of the speculation we have seen over the last few weeks. Lloyds is attractive to an extent to a bank outside of the UK."