Doorstep lender Provident Financial has insisted it has a “clear plan” for growth and has substantially resolved all of its outstanding regulatory issues as it ramps up a campaign to defend itself against a £1.3bn hostile takeover bid.
The group reiterated its rejection of rival Non-Standard Finance’s takeover offer, which is being spearheaded by boss John van Kuffeler, who was previously chief executive and chairman of Provident.
Patrick Snowball, chairman of Provident, said: “As stated on 25 February, the board believes strongly that the offer made by NSF is not in the interests of all shareholders.
“Its offer undervalues Provident, has major strategic flaws, contains a number of misguided assumptions about the Provident business and includes future plans which we consider to be fraught with execution risk and which, as NSF themselves state, are subject to a post-completion review.
“The existing management team has stabilised the business in a very turbulent period over the past 18 months, which has required addressing managerial mistakes of the past, and now has a clear strategy for delivering attractive returns to shareholders.
“Now is not the time to be distracted from delivering on the potential of the group for all of our shareholders by an unattractive offer.”
Last month sub-prime lender NSF tabled an all-share takeover bid for troubled Provident at 511p per share.
Mr van Kuffeler told The Yorkshire Post that Provident’s head office in Bradford would remain at the heart of the business, in the event of a takeover being successful.
He said: “We will absolutely keep the Bradford head office. Bradford is the home and heart of the whole Provident group.
“The current board are all based in London as are a lot of senior managers. 1 Godwin Street is the heart of the business and the drift to London will be reversed.”
However, Provident hit back urging its shareholders to take no action and saying that a takeover could have a “negative and destabilising impact on its stakeholders, including its customers”.
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’tthink this is a sensible plan and I’m not sure they can implement the plan.”
Provident went on to list its objections to the deal, including opposing the sale of its Moneybarn and Satsuma units.
It also questioned NSF’s track record and ability to manage a business of the scale of Provident.
The Competition and Markets Authority (CMA) has also waded in to the proposed takeover. It issued an initial enforcement order which demands that NSF does not make any move to combine the two businesses for now.
The CMA is considering whether to further investigate any potential merger. The order is intended to ensure the companies stay separate while this process is ongoing.