Subprime lender Provident Financial PLC (LON:PFG) has once again reiterated its opposition to the “financially flawed” takeover bid from Non-Standard Finance PLC (LON:NSF) after an official offer document was released on Saturday just days before its full-year results on Wednesday.
In a statement on Monday, Provident’s board said they were “surprised” that the offer document from NSF had been “unable” to address a number of “material issues”, including what they said was “limited banking and credit card experience” among NSF’s management as well as a letter sent to the firm by the Financial Conduct Authority (FCA) last week warning that it would act on any rise in unaffordable lending following a successful takeover.
READ: Non-Standard Finance profits rise in 2018 as it reiterates bid for Provident Financial
"The information contained within NSF's offer document does nothing to change the Board's view that the offer is not in the interests of all shareholders and lacks both commercial logic and regulatory understanding”, said Peter Snowball, Provident’s chairman.
In the offer document, NSF’s chief executive (CEO) and founder John Van Kuffeler, who previously served as Provident’s CEO and chairman for 22 years, said “the time for change is now” and that the company had lost its way since he stepped down in 2013.
Van Kuffeler also attacked the existing Provident board as “incapable” of reversing a number of issues at the firm, which has seen its share price fall around 81% over the last 2 years after a series of regulatory probes relating to lending practices at both its credit card division, Vanquis Bank, and its car financing arm Moneybarn.
READ: Provident Financial hits back at hostile offer from Non-Standard Finance, says it has resolved regulatory issues
However, in a statement last week, Provident said all its regulatory issues had now been resolved and that the management team had “stabilised the business in a very turbulent period” over the last 18 months and now had “a clear strategy” to deliver returns.
NSF is offering 8.88 shares for each Provident share in the hostile bid, which is currently backed by investors representing 49.4% of Provident’s holdings, with NSF shareholders to vote on issuing the new shares on 26 March.
The offer, which values Provident at around £1.3bn, has provoked particular ire from the company’s management as it offers no premium on the current market cap of around £1.4bn.
In early trading Monday, Provident shares were up 2.2% at 569.8p while NSF shares were up 1.7% at 60.2p.
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