Hostile takeover of Provident Financial would lead to ‘material value destruction’ for shareholders
The Board at Provident Financial, the Bradford sub-prime lender which is under offer from Leeds-headquartered Non-Standard Finance (NSF), has this morning hit back at its rival over the £1.3bn hostile takeover plan.
On Monday, NSF announced an extension of its offer for the rival firm until 15 May after it received acceptances from shareholders holding over 50%.
This morning, Provident’s Board responded, stating: “The Provident Board notes the announcement from NSF on 29 April, which it believes falls far short of providing satisfactory responses to shareholders and yet again demonstrates a disregard for Provident shareholder value. NSF’s announcement does nothing to allay the Provident Board’s significant concerns around the strategic, operational and financial merits of the Offer.
“The Board continues to believe that the Offer undervalues Provident and that NSF’s plans for the business could also result in material value destruction for Provident Shareholders. In addition, the Board continues to question the suitability and competence of the NSF management team, which has overseen unlawful distributions, to run Provident’s much larger, more complex and dual-regulated business, in particular Vanquis Bank.”
The Provident Board believe NSF’s revised timetable leaves Provident Shareholders exposed to a “potential blind and uncosted remedy” from the Competition and Markets Authority (“CMA”).
The listed sub-prime lender also stated that NSF had not provided satisfactory answers to Provident’s questions in relation to its offer. adding that it “suggests either that the NSF management team does not have sufficient answers, or that it is unwilling to provide them with sufficient detail such that Provident Shareholders can make a fully informed and considered assessment of the Offer.
“Given the inadequacy of its response to these straightforward questions, NSF is not addressing the needs of those Provident Shareholders who, holding some 49 per cent. of Provident’s shares, have not assented their shares to the Offer.”
The board said that the offer still undervalued Provident. Provident also published a separate document detailed why and how NSF had carried out “unlawful shareholder distributions and share buy-backs.”
