Rival still pursuing £1.3bn takeover bid of Provident Financial
Non-Standard Finance (NSF) has announced still intends to pursue its proposed £1.3bn takeover bid of the Bradford-based subprime lender, Provident Financial.
During a preliminary announcement of its full year results, NSF said it will capitalise on its operational and commercial success by acquiring Provident to “unlock substantial value for all shareholders of, and stakeholders in, both Provident and NSF.”
In February, NSF announced it was looking to acquire 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 valued each Provident share at 551 pence and the entire share capital at £1.3bn.
Earlier this week, Provident announced that NSF’s offer “should be firmly rejected” as it is not in the best interests of Provident’s shareholders.
The board of Provident also voiced their concerns over “operational and execution risks” due to what they identify as the changing regulatory environment, NSF’s track record of value destruction and NSF’s limited experience across all of Provident’s businesses.
Despite this rejection, NSF this morning claimed that once the takeover bid is completed, “a well-balanced group with leading positions in some of the most attractive segments of the non-standard finance sector” will be created.
Provident has endured a torrid couple of years, although now has a different management team in place.
Former Provident Financial chief executive John van Kuffeler left his role to set up NSF five years ago, and has quickly built the business into a rival – and potential owner – of Provident.
NSF added that under the leadership of its board and management team, the transaction also represents “an opportunity to unlock substantial value from an enlarged customer base in a highly specialised sector.”
As part of the transaction, NSF intends to complete a demerger of its home credit business, Loans at Home, to assist with the Competition and Markets Authority competition approval process and for Loans at Home to be admitted to trading either on the Main Market or on AIM.
NSF claims that the demerger will allow Provident shareholders who participate in the transaction, as well as existing NSF shareholders, to receive shares in the newly-listed Loans at Home.
The takeover bid is now subject to a number of conditions that include approval of the issuance of the new NSF shares by NSF Shareholders, receipt of approvals from the Financial Conduct Authority, the Prudential Regulatory Authority and the Central Bank of Ireland, receipt of approval from the CMA and other conditions and further terms.
