1st May 2019 09:38
LONDON (Alliance News) - The ongoing war of words between doorstep lending rivals Provident Financial PLC and Non-Standard Finance PLC continued Wednesday, with Provident hitting back at its smaller suitor this time.
On Monday, Non-Standard Finance set a May 15 deadline for Provident shareholders to accept the GBP1.3 billion takeover offer it made for Provident in early March.
Provident replied Wednesday reiterating its belief the offer is "fraught with risks and that it is clearer than ever that the offer should be rejected".
Provident noted that Non-Standard Finance has now admitted to paying five "unlawful" dividends between 2016 and 2018, aggregating about GBP12.5 million, and 85 "unlawful and consequently void" share buy-backs of a total of 5.0 million shares worth GBP3.5 million between 2017 and 2019.
"The fact remains that since the Non-Standard Finance IPO, Non-Standard Finance has not generated post tax profits. The dividends and share buy-backs have therefore effectively been returning to shareholders monies raised from them. This can be evidenced by the fact that the unlawful dividends increased the Non-Standard Finance group's retained losses in each year they were paid. There is no explanation provided in the explanatory notes to the Non-Standard Finance AGM notice as to how profits have been created to make good the deficits in profits available for distribution," said Provident.
Non-Standard Finance Chief Executive, and former Provident Chair, John van Kuffeler released a statement on Monday reiterating his belief that the offer is "compelling" and he "cares passionately" about Provident.
Provident returned the favour Wednesday, saying the announcement "falls far short of providing satisfactory responses to shareholders and yet again demonstrates a disregard for Provident shareholder value".
In particular, Provident said setting a May 15 hard deadline will leave Provident shareholders "exposed to a potential blind and uncosted remedy from the Competition & Markets Authority".
Non-Standard Finance has received valid acceptances for 128.5 million Provident shares, equivalent to 51% of Provident's issued capital. However, it needs acceptances from 90% of shareholders for a successful takeover.
For its part, Non-Standard Finance believes the concerns of UK authorities that are currently holding up the deal will be resolved by June 5.
Provident said van Kuffeler's announcement "does nothing to allay the Provident board's significant concerns around the strategic, operational and financial merits of the offer".
"The responses from Non-Standard Finance to Provident's questions in relation to its offer are inadequate and come a full 27 days after these questions were first put forward on April 2, which suggests either that the Non-Standard Finance management team does not have sufficient answers, or that it is unwilling to provide them with sufficient detail such that Provident shareholders can make a fully informed and considered assessment of the offer," said Provident.
Shares in Provident were up 0.1% Wednesday at 531.60 pence each. Non-Standard Finance was trading trading at 53.00 pence each.
Related Shares:
PFG.LNSF.L