Provident Financial’s suitor wins more than 50 per cent support for hostile takeover

The latest twist in the Provident Financial takeover saga will be studied closely in the City.  Photo: Jonathan Brady/PA Wire
The latest twist in the Provident Financial takeover saga will be studied closely in the City. Photo: Jonathan Brady/PA Wire
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Provident Financial suitor Non-Standard Finance has said it has secured commitments for its £1.3 billion hostile takeover representing just over half of shares in the doorstep lender.

Non-Standard said it has acceptances for 50.7% of Provident’s shares, although this includes the previously announced support from Woodford Investment Management, Invesco Asset Management and Marathon Asset Management, who together hold a 49% stake in Provident.

The acceptance condition for the offer is currently not less than 90%, but Non-Standard Finance (NFS) can vary the level and said further announcements on this will be made in due course.

NSF chief executive John van Kuffeler said: “We are delighted to have received acceptances for a majority of Provident’s shares.

“This represents a clear validation of the experienced NSF management team and of our transformation plan to unlock substantial value for shareholders, as well as providing us with a platform to complete this transaction and get on with the job of implementing our plan.”

But Provident, which owns Vanquis Bank and Moneybarn, insisted it is continuing to explore “all appropriate alternatives” to maximise value for shareholders and continues to advise its shareholders to “take no action”.

It added: “The Provident board continues to have very material concerns about the strategic, operational and financial merits of the NSF offer and is keen to ensure that all of its shareholders, including those that do not have a shareholding in NSF, have full clarity with respect to the terms and implications of the NSF offer.”

In ramped-up efforts to fend off the unwanted advances from its smaller rival, Provident also questioned the financial aspects of the bid and how NSF plans to “address the potential funding, ratings, balance sheet and earnings impacts from a sale of Moneybarn and still achieve a meaningful capital distribution”.

Provident also raised concerns over who NSF would put at the helm of its Vanquis Bank business and how it will persuade the competition watchdog that a plan to list Loans At Home will be enough to ease concerns.

In a separate announcement on Tuesday, Provident also said its chief financial officer, Simon Thomas, would take up to three months’ leave from April 5 for heart surgery.

Senior adviser and former PwC partner Tony Skrzypecki will take on the role on an interim basis, with Mr Thomas set to return no later than June.

James Hamilton, an analyst at Numis, said NSF’s announcement on the level of acceptances suggests that “no new, significant shareholders have joined the offer group”.

He added: “As the deal isn’t a scheme of arrangement, NSF does not need acceptances greater than 75%, ideally greater than 90%.”