CMA opens inquiry into NSF’s bid to buy Provident
Competition watchdog sets late July deadline to decide on whether to launch in-depth probe
The UK’s competition regulator said on Wednesday it has opened an inquiry into Non-Standard Finance’s proposed hostile takeover of Provident Financial.
The Competition and Markets Authority said it would decide by July 23 on whether it will launch an in-depth “phase two” investigation into the proposed deal.
NSF has pushed ahead with its bid to acquire Provident despite only securing the support of 53.5 per cent of the rival subprime lender’s shareholders. The deal remains conditional on the support of the CMA, the Financial Conduct Authority and the Prudential Regulation Authority.
In March, the FCA warned NSF that it would take “immediate” action if its plans to merge with Provident led to an increase in unaffordable lending.
A spokesperson for Provident said: “Having waited until declaring the bid unconditional, they have put our shareholders in the impossible position of having to consider the transaction without knowing what the competition remedies and costs might be.”
NSF, a company set up by Provident’s former chief executive John van Kuffeler, acknowledged in a statement following the CMA announcement that the merger has the potential to substantially reduce competition for home loans in the UK, but indicated a possible solution was to divest of its “Loans at Home” home credit business.
Mr van Kuffeler said on Wednesday: “We remain confident in the merits of our offer and the benefits it will bring for Provident, its customers, employees and shareholders.”