NSF declares £1.3bn Provident offer ‘unconditional’
The hostile takeover of Provident Financial by Non-Standard Finance has moved forward a step, with NSF dropping the level of acceptances needed from shareholders.
It has secured the support of 53.5% of the voting rights of Provident, but this is insufficient to force Provident to start the compulsory acquisition procedure. This is an increase of only 4% in the 12 weeks since NSF launched its “unsolicited” offer.
Provident said that 92% of shares were held by independent shareholders and that they had still not agreed to the offer. Shares represented by Woodford Investment Management, Invesco Asset Management and Marathon Asset Management LLP are said to be in favour of the deal.
NSF had set a deadline for shareholders of May 15 for its bid to be made unconditional.
While NSF have said it is “unconditional” there are still conditions which would impact the takeover, including Financial Conduct Authority and Competition and Markets Authority approvals.
NSF has given itself a deadline of 5 June for the offer to be “wholly unconditional”. The CMA has yet to make a decision, and Provident said this would be unlikely to happen before 5 June.
In a statement to the stock exchange, Provident said: “The Provident board believes that the strategic and financial flaws associated with the NSF offer clearly demonstrate that Provident shareholders would be better off not assenting their shares to the offer.”
This comes after investment firm Schroders, which represents 14.6% of the shares in Provident announced that they would not accept the takeover.
The takeover has become increasingly bitter, with NSF criticising Provident’s management, in turn, Provident have called the offer “destructive”.
Provident hit back at NSF, saying that it has not provided satisfactory answers to key questions regarding the logistics of the deal. Issues in contention include the viability and sustainability of its Loans at Home division as a standalone business, which would be demerged in the event of a takeover, the impact of the FCA’s review of high cost credit and the closure of Satsuma.
