Provident rebuffs rival’s hostile takeover offer as ‘irresponsible’
Non-Standard Finance had launched takeover bid late last week
Provident Financial, the doorstep lender, has rebuffed a hostile takeover approach from a rival led by its former chief executive, branding it “irresponsible”.
Non-Standard Finance, a company founded by John van Kuffeler in 2014 after his exit from Provident, launched an unexpected bid last Friday. Three shareholders controlling more than 50 per cent of Provident — and which are also major shareholders of NSF — gave their backing to the deal.
“This hostile offer represents an irresponsible approach in the context of a financially regulated business which is recovering from a period of substantial instability,” Provident’s board said in a statement on Monday.
It added that the offer “could have a negative and destabilising impact on [Provident’s] stakeholders, including its customers, for a considerable period of time.”
“The Provvy” has faced a turbulent 18 months, issuing three profit warnings as both regulators and parliament have cracked down on lenders targeting people who find it difficult to get credit with high interest loans. All three of its main businesses have been investigated by the Financial Conduct Authority.
The company’s chairman, Patrick Snowball, on Monday blamed the company’s previous management for the difficulties.
“Provident Financial’s management team has stabilised the business in a very turbulent period over the past 18 months, which has largely consisted of addressing managerial mistakes of the past”, he said.
Provident said it recognised the backing given by three of its largest shareholders — Neil Woodford, through his funds, Marathon and Invesco — to NSF, in which the shareholders also have a substantial holding. But it said it was committed to maximising value for all shareholders and would explore alternatives to achieve that objective.