Shareholder Schroders gives Provident board its backing in NSF hostile takeover tussle

A shareholder in Provident Financial Group (PFG) has written to the doorstep lender’s chairman saying it will not accept rival Non-Standard Finance’s (NSF) takeover offer for the Bradford-based company.
By The Newsroom
Published 8th May 2019, 09:34 BST
John van Kuffeler, chief exec of NSF.John van Kuffeler, chief exec of NSF.
John van Kuffeler, chief exec of NSF.

Investment management firm Schroders, which currently holds 14.6 per cent of the stock in Bradford-based Provident, backed the existing mangement following NSF’s hostile takeover bid.

The backing comes amidst a war of words between the two business over NSF’s £1.3bn takeover attempt. Provident has called the offer “significantly flawed” and “value destructive”.

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The takeover has been backed by shareholders Woodford, Invesco and Marathon, all of whom have a shareholding in NSF.

Kevin Murphy, fund manager at Schroders, wrote to Patrick Snowball, chairman of Provident, yesterday. He said: “NSF faces a number of operational and regulatory challenges, including an FCA investigation of its guarantor lending business.

“In our view, the best interest of PFG shareholders would be best served by the existing management continuing to execute on their recovery plans.”

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.”

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Last week NSF insisted it is on track to receive regulatory approval for the deal. Investors Provident will have until May 15 to register acceptances for the deal, a deadline that will not be extended.

The protracted tussle has seen heated words exchanged. Mr van Kuffeler promised to keep the business in Bradford if the takeover was successful, when NSF launched its bid. However, it wasn’t long before Provident fired back.

Malcolm Le May, chief executive of Provident, said: “In hostile takeovers, the first salvo is fired by the aggressor. You’ll see a different picture emerging.

“I will be raising hell on earth to get a better deal for shareholders. I don’t think this is a sensible plan and I’m not sure they can implement the plan.”

Related topics:Malcolm Le MayBradfordKevin Murphy