NSF drops hostile £1.3bn Provident bid
Non-Standard Finance has pulled the plug on its £1.3bn hostile takeover bid for Provident Financial, the UK’s largest payday lender.
After talks with regulatory authorities, NSF’s offer for Provident would lapse as the regulatory condition would not be satisfied by midnight today, the company said in a statement.
NSF said that after discussions with regulatory authorities, in learning that the Prudential Regulation Authority had decided that it would not meet minimum regulatory capital levels, it had come to the conclusion that conditions for the offer “will not be satisfied by midnight on 5 June 2019, the last time by which all conditions to the offer must be satisfied or waived.”
“Accordingly, NSF has decided, with the consent of the Takeover Panel, to lapse the offer,” it added.
“Therefore, as of midnight on 5 June 2019, the offer will lapse and will not be capable of further acceptance and Provident Shareholders who have accepted the offer will cease to be bound by such acceptances.”
John van Kuffeler, chief executive of NSF, said: “I am very disappointed that despite our best efforts customers, employees and shareholders will not now benefit from our transformation plan to build a brighter future by combining Provident with NSF.
“I wish to thank our shareholders for their support and all of NSF’s staff and self-employed agents for their continued dedication. NSF will continue to focus on delivering value to its customers, employees and shareholders by providing a helping hand to the 10-12 million UK consumers that are either unable or unwilling to access mainstream credit.
“Each of our businesses has a top three position in its respective market segment and we believe each is capable of delivering attractive long-term returns for NSF shareholders through a combination of capital and dividend growth.”
NSF said total fees for the transaction, which will be treated as an exceptional item in the 2019 half year results, are expected to amount to between £10m and £10.5m, which it said is at the lower-end of the range estimated, and will be met from its existing resources.
A string of investors in Provident came out against NSF’s bid, the latest being Janus Henderson, which owns 1.3% of its shares and said in a statement last night: “We are supportive of PFG’s existing strategy and recent results suggest they are making good progress towards recovery of the home credit business. We have not been convinced of a compelling logic for the combination of NSF with PFG. Therefore we do not think it is in the best interests of our clients for us to accept the offer.”
Henderson followed Aberdeen Standard Investments, Schroders, Coltrane Asset Management and M&G Investments in rejecting the bid.
The group collectively own just under 25% of Provident’s shares. NSF would have required the support of 75% of Provident’s shareholders to delist it from the London Stock Exchange.
Meanwhile, the UK’s Competition and Markets Authority (CMA) recently raised questions over the proposed deal, saying that it was considering whether a merger of the two would result in a substantial lessening of competition.
