28th May 2019 09:04
LONDON (Alliance News) - Provident Financial PLC said Tuesday that shareholder M&G Investments will not accept the hostile takeover bid from Non-Standard Finance PLC.
Provident said it has now received statements of intent to reject the offer from Schroders PLC, Coltrane Asset Management and M&G Investments. Between them, they hold a 20.2% interest in Provident.
In a letter to Provident, M&G Investment said it is "supportive" of Provident's current strategy. M&G Investment said it "does not believe that a combination with Non-Standard Finance and subsequent break up of the enlarged group will create value for Provident shareholders, and therefore is not in the best interest of our investors."
M&G Investment is the UK investment business of FTSE 100-listed life insurance and financial services company Prudential PLC. M&G Investment sits within M&G Prudential, which is currently being demerged from Prudential PLC.
M&G Investment holds a 1.7% interest in Provident.
FTSE 100-listed wealth manager Schroders, which holds a 15% stake in Provident, previously had said the offer is "not in the best interest" of Provident shareholders. Schroders said it believes the minority shareholders of Provident "are not being protected".
Non-Standard Finance's GB1.3 billion offer for fellow sub-prime lender Provident has become unconditional - after Non-Standard Finance lowered its acceptance condition to 50% from 90%. So far, holders of 53% of Provident shares have taken up the offer, but these accepting Provident shareholders also collectively make up the majority of Non-Standard Finance shareholders, holding shares in both companies.
Non-Standard Finance launched its hostile bid for Provident in March, which has become increasingly acrimonious ever since. Provident has objected to the takeover, calling it "fraught with risks". In return, the bidder, has accused Provident of making "incorrect assertions" about Non-Standard Finance's capital position.
Speaking Tuesday, Provident reiterated its stance: "The Provident board believes that the offer is significantly flawed and value destructive, and urges its shareholders to take no action in relation to the Non-Standard Finance offer."
Non-Standard Finance said that - having passed the milestone - it will approach Provident again in the hope of establishing "pragmatic and constructive dialogue".
Shares in Provident were up 0.7% Tuesday morning at 456.10 pence each. Non-Standard Finance was trading up 0.7% at 48.54p.
Related Shares:
PrudentialSchrodersPFG.LNSF.L