Provident Financial gets £1.3bn bid from rival NSF
Sub-prime lender Non-Standard Finance (NSF) has made a £1.3bn takeover offer for rival Provident Financial.
NSF boss John van Kuffeler was previously chief executive and chairman of Provident, a doorstep lender with a history of financial troubles. He said the deal would “create a market leader in non-standard finance”.
NSF said the takeover was backed by more than 50% of Provident’s shareholders, including fund manager Neil Woodford, Invesco and Marathon.
Investors must still vote on whether to approve the deal.
Provident has seen its shares plunge after profit warnings and the resignation of a former chief executive.
In January, it warned again that profits would be below analysts’ expectations. The group said it had seen a rise in bad debts at its Vanquis Bank arm and falling numbers of new accounts after clamping down on its lending.
Under the terms of the offer, Provident shareholders would get 8.88 new NSF shares for each Provident share. Based on NSF’s closing share price of 58p on Thursday, the tie-up values Provident at £1.3bn, or 511p per share.
It is the second time NSF has approached Provident.
Mr van Kuffeler said: “We have recognised the strong logic and value creation potential of a combination with Provident for some time and hence approached the Provident board with a proposal in January last year. That approach was rebuffed and since then Provident has further lost its way.
“However, NSF has extensive management expertise and experience, and the correct strategy to turn Provident around and release significant value by combining it with our own fast-growing businesses for the benefit of customers, employees and investors.”
Provident is also recovering from a string of regulatory sanctions.
The Financial Conduct Authority (FCA) fined Vanquis £2m and ordered it to pay £168.8m in compensation for failing to disclose charges of its popular repayment option plan.
Meanwhile, its Moneybarn car loan arm is under investigation by the FCA over how it treats borrowers who fall behind with payments.