Another shareholder deals blow to hostile Provident Financial bid

A major shareholder in Provident Financial has opposed rival doorstep lender Non-Standard Finance’s (NSF) hostile takeover bid.

Aberdeen Standard Investments, which owns 3.1% of the sub-prime lender, said it would not accept NSF’s offer.

It joins Schroders, Coltrane Asset Management and M&G Investments in rejecting the bid.

NSF needs the thumbs-up from 75% of Provident shareholders to be able to merge the business with its own.

Head of UK equities Andrew Millington told the Sunday Times: “As a long-term shareholder in Provident Financial, we intend not to accept NSF’s offer for the business. We understand why some investors who hold shares in both Provident Financial and NSF are supportive of the takeover. But ultimately we don’t believe it’s a good deal for the business nor Provident Financial shareholders.

“We’re also unhappy that NSF has brought forward the deadline for shareholders to accept the bid to next week before the CMA releases the outcome of its review.”

His comments came ahead of a Wednesday deadline for the offer to become unconditional.

NSF has the support of investors representing 53.5% of shares, including fund manager Neil Woodford and asset manager Invesco.

Last week, it was announced that the Leeds-based home credit division of NSF is to be floated on the London stock exchange as an independent company if the £1.3bn hostile takeover of Provident goes ahead.

NSF has told the Competition and Markets Authority (CMA) it would demerge its Loans at Home business to avoid competition concerns.

The competition watchdog said it has opened a preliminary investigation into the proposed merger, inviting both sides to comment to gauge whether a deeper investigation would be required.

It said NSF has acknowledged that the merger gives rise to a “realistic prospect” of a substantial lessening of competition in relation to the home credit overlap.