Provident investor M&G won't back NSF takeover

M&G, which owns 1.7 per cent of Bradford-based Provident, said it doesn't believe the move will benefit shareholders, as the battle for control rumbles on.

In a letter to Provident chairman Patrick Snowball, M&G's head of corporate finance Rupert Krefting said: "I am writing on behalf of M&G Investments to inform you that our current intention is to not accept NSF's offer for Provident in respect of our entire shareholding.

"M&G is supportive of Provident's current strategy and does not believe that a combination with NSF and subsequent break-up of the enlarged group will create value for Provident shareholders, and therefore is not in the best interest of our investors."

Asset manager Schroders, which holds a stake of around 15 per cent in the firm, has also publicly said it will not support the takeover.

NSF, which is run by former Provident CEO John van Kuffeler, tabled the bid with backing from 50 per cent of investors but said it wanted to get 90 per cent of shareholders to support the offer.

NSF has secured the backing of some of its major shareholders including investment guru Neil Woodford, Invesco and Marathon, which hold a 49per cent combined stake.

Last week NSF said it had the support of investors holding 53.5 per cent of Provident's stock and will continue to pursue a hostile takeover.

Provident said that around 20.2 per cent of shareholders have publicly stated that they do not intend to accept the offer.

The deal is now subject to regulatory approval and the verdict of remaining shareholders.

NSF first made a move on Provident in February sparking a bitter war of words between the two lenders. Earlier this month NSF said it expects to reach an agreement to meet concerns raised by the competition watchdog during the first phase of the review of its takeover bid for Provident Financial.