Provident rejects NSF takeover in latest rebuttal

Bradford-based Provident accused NSF of giving an overly positive perspective on its own headline financial performance, despite reporting statutory losses.

In retaliation, NSF dismissed suggestions it would have to raise fresh capital if the sub-prime lender was to succeed in its takeover bid for Provident.

In another rebuttal document, Provident said that, were the deal to go ahead, there may be an "under-capitalisation of the enlarged group", potentially requiring a capital raise.

However, NSF chief executive John van Kuffeler, a former Provident boss, hit back almost immediately, describing the assertion as "complete nonsense".

"Any suggestion of an NSF capital raise or weakness in its financial performance is complete nonsense, and rich coming from Provident," he said.

"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."

The fresh outbursts come a day after Provident's third-largest shareholder, Schroders, refused to support NSF's hostile bid.

The fund manager, which holds a 14.6 per cent stake in Provident, said the offer was not in the best interests of shareholders.

NSF has acceptances for more than 50 per cent of Provident's shares, including from Woodford Investment Management, Invesco Asset Management and Marathon Asset Management, who together hold a 49 per cent stake.

However, the level of support has not moved upwards for several weeks. Investors in Provident have until May 15 to register acceptances for the deal, a deadline that will not be extended.

NSF’s hostile bid for Provident has turned into a bitter war of words between the two subprime lenders, with NSF accusing Provident executives of mismanaging the company.

Provident, established in 1880, has been rebuilding after a botched restructuring of its home credit business led to profit warnings and the departure of its chief executive in 2017.

In a letter to Provident’s chairman Patrick Snowball, Schroders said: “Schroders does not believe that NSF’s offer is in the best interest of PFG shareholders ... NSF’s bid risks destabilising this recovery, and brings additional regulatory risks and uncertainty."