Former Lloyds TSB shareholders will claim in court today that HBOS was “grossly over-valued” in the shotgun marriage with Lloyds in 2009.

At the latest three-day hearing in the Royal Courts of Justice five former Lloyds directors including Sir Victor Bank and Eric Daniels, and Lloyds Banking Group, will defend a claim for £6billion of investor losses being brought by the Lloyds Shareholder Action Group.

Over 300 of the 6000 claimants are corporate entities, including pension funds and other large investment funds in the UK, Europe, North America and Asia, the group said, the remainder being private investors.

Unlike the investor lawsuit against RBS, the Lloyds action is being backed by litigation funders who would take 30 per cent of any settlement.

The action group alleges that in 2009 directors concealed a £10 billion loan facility available to HBOS and covert funding of up to £25.6bn from the Bank of England and $18bn from the Federal Reserve. It says the merger was “a very bad deal for the shareholders of Lloyds because exchanging 0.605 Lloyds shares for each HBOS share constituted a gross over-valuation of HBOS’s share capital”. It also claims a breach of the directors’ duties to permit the critical extraordinary general meeting to take place”.

At the hearing the action group will challenge the value of £11.2bn ascribed to HBOS in the Lloyds accounts and assert that bail-out funding was entirely swallowed up by HBOS losses, not used to recapitalise Lloyds TSB.

It will further ask “whether the director defendants were aware that HBOS was manipulating its LIBOR submissions in order to give the impression that it was financially stronger than was actually the case prior to its acquisition by Lloyds”.

At the last hearing in July the claimants were successful in forcing Lloyds to disclose documents relating to the acquisition, including legal advice. “Lloyds asked for permission to appeal this decision and they have subsequently dropped their appeal,” the group said.

It is now seeking further disclosures from the bank in relation to LIBOR and to the preparation of the 2009 accounts.

Lloyds Banking Group says: “We do not consider there to be any legal basis to these claims and we will robustly contest this legal action.”

*Bank whistleblower Paul Moore has claimed that former HBOS chief executive Andy Hornby was aware that millions of PPI policies had been mis-sold to customers four years before the scandal broke open. Mr Moore, the former HBOS head of risk who made a damning submission to the Treasury Committee in 2009, has published a book on the bank’s crash. Mr Hornby has declined to comment.