Provident Financial shareholders urged to ‘take no action’ on £1.3bn takeover offer
A rival firm has lodged a £1.3bn offer to acquire Bradford-based subprime lender, Provident Financial, and shareholders have now been urged to .
Non-Standard Finance (NSF) is looking to takeover Provident Financial to “create a market leader in the non-standard finance sector.”
NSF has also revealed that more than 50% of Provident’s shareholders are supporting the deal.
The company has valued each Provident share at 551 pence and the entire share capital at £1.3bn.
Once the proposed deal is completed, Provident shareholders will own approximately 87.8% of the enlarged NSF Group.
The acquisition still needs to be approved by investors and regulators.
In response to the offer, Provident Financial said: “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.”
In January, shares at Provident Financial dropped by nearly 20% in trading – wiping £320m from its market value. The drop came after the firm said it expected its full year results for 2018 to be on the “lower end” of market expectations.
John van Kuffeler, founder and chief executive of NSF, said: “This transaction will create a market leader in the non-standard finance sector with a strong position in all four main segments.
“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 added: “However, NSF has extensive management expertise and experience, and the correct strategy to turn Provident around and release significant value by combining it with our own fast-growing businesses for the benefit of customers, employees and investors. I’m delighted that holders of over 50% of Provident’s shares have given their support to our proposal today.”