Provident Financial says hostile bidder Non-Standard Finance is overvalued
Provident Financial today said it had concerns about the valuation of Non-Standard Finance (NSF) which is trying to take it over.
Provident said it had concerns NSF was undercapitalised, it said NSF’s business was facing “significant headwinds”, it said there was an overly positive perspective on NSF’s headline financial performance and said NSF was overvalued relative to other UK lenders.
It also said it “strongly believes” the risks associated with a review of the deal by the Competition Markets Authority (CMA) are risks that Provident shareholders should not have to face, and said it “therefore urges Provident shareholders to take no action in relation to the offer.
John van Kuffeler, NSF’s group chief executive, said: “Any suggestion of an NSF capital raise or weakness in its financial performance is complete nonsense and rich coming from Provident.
“Unlike Provident, NSF has not needed an emergency capital raise and does not have a recent history of three profit warnings, the last being only in January.”
Provident’s latest broadside against NSF comes after its third-largest shareholder Schroders publicly came out against the offer on Tuesday.
The UK fund manager, which holds a 14.6 per cent stake in Provident, said the offer was not in the best interests of Provident shareholders.
NSF’s offer has gained the support of more than 50 per cent of Provident shareholders, including trader Neil Woodford, Invesco Asset Management and Marathon Asset Management.
On Tuesday NSF urged Provident shareholders to accept its offer by the deadline of 1pm on 15 May.
It said “the performance of the Provident business continues to fall far short of its potential.”
NSF added: “Our offer and clear transformation plan present a brighter future for customers and employees whilst unlocking substantial value for shareholders.”