Provident says independent shareholders have not agreed to NSF takeover

NSF has received the backing of the holders of just over 51 per cent of Provident’s shares since it launched its offer, but has made almost no progress towards a 90 per cent target.

NSF has extended the closing date for its offer by one week to May 15 and said it would not extend the deadline again.

Provident said it has met and engaged constructively with shareholders owning about 35 per cent of the company, reiterating its call for a rejection of the offer.

Analyst Ian White at Autonomous said: "Provident highlights that 96 per cent of ‘independent’ shareholders (i.e. excluding the three large shareholders who own shares in both Provident and NSF), have so far not accepted NSF’s offer.

"Despite our view that the deal will be damaging to Provident shareholders, a lack of support to this degree is surprising, and alongside the public rejection of the offer by a top three shareholder earlier this week, increases the probability that the deal will fail to proceed in our view."

NSF rebuked Provident’s arguments that the capital position of the enlarged group may breach regulatory minimum requirements.

"NSF points out, for example, that it believes the overall capital position of the enlarged group will be 'robust, and in excess of the PRA requirements that Provident has itself disclosed'," said Mr White.

"We would continue to encourage shareholders to reject the bid."

Provident clarified its statement by saying that its non-independent investors include Woodford, Invesco and Marathon, which have a combined 51 per cent stake in Provident.

The other 49 per cent is accredited to the independent shareholders. Bearing in mind 96 per cent of these independents have yet to sign up to NSF's offer, this means 47 per cent have not backed it yet.

NSF’s £1.3bn bid for Provident has turned into a bitter war of words between the two subprime lenders, with NSF accusing Provident Financial executives of mismanaging the company.

Provident’s third-biggest shareholder British asset manager Schroders said on Wednesday it would not accept the bid.

In response to Provident, NSF said: "The Provident board has gone to great lengths to deflect attention from its flawed strategy, regulatory breaches, broken promises and underwhelming financial performance.

"Its latest tactic has been to attempt to raise concerns about NSF’s capital position."