Troubled subprime lender Provident slams ‘irresponsible and highly opportunistic’ £1.3bn takeover bid by rival
Provident executives have hit out at an “irresponsible and highly opportunistic" £1.3bn takeover bid by smaller rival Non-Standard Finance.
The struggling subprime lender hit back at its peer in robust fashion this morning after receiving an all-share offer for the company on Friday.
Read more: Provident shareholders including Neil Woodford accept £1.3bn takeover
Non-Standard Finance’s offer, pledging to revitalise the firm, has gained the support for more than 50 per cent of Provident shareholders, including leading fund manager Neil Woodford.
But Provident bosses, after considering the approach over the weekend, branded the move “irresponsible.”
Chairman Patrick Snowball said: “It is extremely disappointing that NSF has chosen to announce an unsolicited and highly opportunistic offer for Provident Financial.
Snowball said the offer did not represent the value of the company and its prospects and had a number a concerns regarding the all-share offer.
He added: “The board therefore intends to do everything it can to maximise value for all shareholders over the coming weeks and will explore all appropriate alternatives to achieve that objective.
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 on Thursday – and would leave existing Provident shareholders owning approximately 87.8 per cent of the enlarged NSF Group.
Read more: Provident Financial shares tumble on profit warning
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.”
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.