11th Mar 2019 08:47
LONDON (Alliance News) - Subprime lender Provident Financial PLC on Monday reiterated its view that the offer for the company received by smaller peer Non-Standard Finance PLC is "strategically and financially flawed".
Furthermore, Provident argued that the offer presents significant risk in terms of both execution and shareholder value.
Therefore, Provident's board continued to "strongly" urge shareholders to take no action in respect of the offer.
Provident Financial Chair Patrick Snowball said: "The information contained within the Non-Standard Finance offer document does nothing to change the board's view that the offer is not in the interests of all shareholders and lacks both commercial logic and regulatory understanding.
"Non-Standard Finance has not addressed the concerns that have been raised and they continue to make financially unsound proposals such as the sale of Moneybarn, the sale or closure of Satsuma and the demerger of Non-Standard Finance's Loans at Home business. This offer does not reflect that times have changed and ignores the significant progress we have made with our customers, staff and regulators over the past 12 months."
He concluded: "We strongly believe that the turnaround of Provident is well underway - we have a clear strategy that is already delivering tangible results. The offer risks jeopardising Provident's turnaround and presents risks to shareholder value which have not been addressed."
Non-Standard Finance approached the company with an hostile all-share takeover offer worth GBP1.3 billion in February.
Under the offer, Provident shareholders will receive 8.88 new Non-Standard Finance shares for each Provident share held.
On Saturday, Non-Standard Finance published the offer document alongside a letter from Chief Executive Officer John Van Kuffeler to Provident shareholders.
Van Kuffeler, who was CEO and Chair of provident for 22 years, said the offer presents a "compelling and achievable vision" for a better future for Provident, its shareholders, employees, and customers.
He also attacked the board of Provident describing it as "incapable of implementing any kind of clear strategy" and "incapable of reversing its multitude of problems".
"The Non-Standard Finance board believes that the transaction would mark the end of what has been a very difficult period for Provident. We believe that by combining Provident with Non-Standard Finance we will create a leading UK non-standard finance provider, with strong positions in credit cards, home credit, branch-based lending and guarantor loans," he added.
The offer, according to Van Kuffeler, has already received formal support by Provident shareholders holding 49.4% of the company's shares.
Non-Standard Finance shares were trading up 1.4% at 60.00 pence each while Provident Financial shares were 2.7% higher at 572.60p.
Related Shares:
PFG.LNSF.L