Credit lender Provident Financial said it remains "gravely concerned" by suitor Non-Standard Finance's failure to respond to the questions it raised 10 days ago.
Bradford-based Provident said its shareholders deserve clarity to enable them to make an informed decision on the merits, or otherwise, of NSF’s £1.3bn offer.
Provident said it has significant concerns about the offer, not least because NSF has repeatedly made pre-tax losses on a statutory basis, its share price is near an all-time low, and it would “opportunistically benefit from the relative financial strength” of Provident.
Provident’s chief executive Malcolm Le May said the terms of the offer remain highly unattractive for Provident shareholders.
The firm said that based on the latest NSF share price, the offer values each Provident share at 449p, a 14 per cent and 12 per cent discount respectively to the latest Provident share price and the share price immediately prior to NSF’s Rule 2.7 announcement.
Provident strongly advised its shareholders to take no action in relation to the offer.
It also noted that the vast majority of shareholders who have accepted the offer are investors who also hold shares in NSF and who may therefore have a different perspective as to the merits of the offer than other shareholders.
Analyst John Cronin at Goodbody said: “We have analysed, in detail, Provident’s questions concerning whether NSF had sufficient distributable reserves to effect some of the distributions to shareholders that NSF effected in recent years and we believe that these questions could present material risks to NSF’s ability to execute an acquisition of Provident on the current proposed terms.
“With that said, we believe that the industrial logic underpinning NSF’s interest in Provident is unquestionable and we see the deal get done at some point.”
Late on Friday, NSF said it had identified technical infringements regarding historic distributions. It said all of the infringements can be rectified and none will impact its financial position, prospects or shareholder value.