Troubled subprime lender Provident receives £1.3bn takeover bid from smaller rival Non-Standard Finance
Struggling sub-prime lender Provident Financial has received a £1.3bn takeover bid from rival Non-Standard Finance.
The all-share offer, pledging to revitalise the firm, has been supported by Provident shareholders, including leading fund manager Neil Woodford.
Read more: Provident Financial shares tumble on profit warning
The doorstep lender has seen its share price plunged 84 per cent since May 2017, as it has battled with a financial watchdog investigation, profit warnings and struggles with its credit card business Vanquis Bank.
Non-Standard Finance chief executive John van Kuffeler said the company initially approached Provident with a proposal in January last year.
He said: “That approach was rebuffed and since then Provident has further lost its way.
“However, NSF has extensive management expertise and experience, and the correct strategy to turn Provident around and release significant value by combining it with our own fast-growing businesses for the benefit of customers, employees and investors.”
More than 50 per cent of Provident shareholders, including Woodford Investment Management, Invesco Asset Management and Marathon Asset Management have accepted the bid, which value the company at £1.3bn.
The offer values Provident shares at 511p – similar to its price of 511.4p at the close yesterday – and would leave existing Provident shareholders owning approximately 87.8 per cent of the enlarged NSF Group.
Van Kuffeler added: “This transaction will create a market leader in the non-standard finance sector with a strong position in all four main segments.”
Read more: Provident appoints new finance chief after turbulent 18 months
NSF said it would look to sell Provident’s car loans arm, Moneybarn, which is still under investigation by the Financial Conduct Authority (FCA) over how it decides whether applicants can afford loans.
Its Satsuma Loans business, which was fined £80,000 by the FCA for sending almost a million nuisance texts advertising high-interest loans, could also be sold.
In a statement, Provident said: "The board's considered response to the offer will be announced in due course.
"In the meantime, shareholders are strongly advised to take no action in respect of the NSF offer."