The company behind a £1.3bn takeover of credit lender Provident Financial has told the Yorkshire Post that Provident’s head office in Bradford will remain at the heart of the business.
Sub-prime lender Non-Standard Finance (NSF) has tabled an all-share takeover bid for its troubled rival Provident.
NSF chief executive John van Kuffeler, who is spearheading the deal, was previously chief executive and chairman of Provident.
He told the Yorkshire Post: “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.”
Provident shareholders will receive 8.88 new NSF shares for each Provident share. Based on NSF’s closing share price of 58p on Thursday, the tie-up values Provident at £1.3bn, or 511p per share.
Mr van Kuffeler said: “We have recognised the strong logic and value creation potential of a combination with Provident for some time and hence approached the Provident board with a proposal in January last year. That approach was rebuffed and since then Provident has further lost its way.”
He said NSF will simplify the business and allow agents to spend more time with customers.
“It’s enormously sad to see what has happened to Provident. It’s been frankly, largely destroyed," he said
Provident will have around 1,000 staff at its Bradford head office once a voluntary redundancy programme to axe 180 jobs is completed.
Asked whether all 1,000 employees will keep their jobs, Mr van Kuffeler said: “We will have to look once we complete. A good chunk are working for Vanquis. They are very effective and would continue."
He said the Satsuma business will either be sold or closed. If it is sold, Satsuma employees will go to the new firm. If it is closed, Mr van Kuffeler said staff could apply for other jobs.
The deal, which is backed by more than 50 per cent of Provident investors, will see Provident shareholders own 87.8 per cent of the new entity.
Investors must vote on whether to approve the deal, but it has already received the blessing of star fund manager Neil Woodford, Invesco and Marathon.
There were mixed reactions from analysts.
Russ Mould, investment director at AJ Bell, said: “This deal looks ballsy and Non-Standard Finance could be punching above its weight.
“It seems like an opportunistic move to kick out the Provident management team and for van Kuffeler to regain control of his former empire.”
Analyst Phil Dobbin at Jefferies said: “To us, this plays to the frustration that we have felt, which is that recovery within Provident continues to drift further out at each set of results.
“Provident shareholders are being asked to accept a nil premium offer for better management.”
Provident said in a stock market update: “The board’s considered response to the offer will be announced in due course. In the meantime, shareholders are strongly advised to take no action in respect of the NSF offer.”
Last month Provident saw shares tumble after it warned profits will be at the lower end of expectations.