As deadline looms in battle for doorstep lender, Provident Financial slams ‘shambolic’ takeover bid
The firm battling to buy doorstep lender Provident Financial has launched a last-ditch bid to woo investors amid fears its deal could collapse.
Non-Standard Finance is fighting to convince Provvy shareholders about the merits of its hostile raid.
But in a further escalation in the war of words between the rivals, Provvy has branded the bid by NSF ‘dreadful’ and ‘shambolic’.
Eyes on the prize: Non-Standard Finance is led by 70-year-old John van Kuffeler
With the final deadline for the takeover drawing near, NSF has persuaded just 53.54 per cent of Provvy’s investors to support its plans.
Although this is technically enough to push the deal through, it will not allow NSF to fully merge the two businesses.
And shareholders who initially backed the takeover are increasingly concerned over its prospects for success. Analysts at Goodbody said the deal could be called off.
Veteran City commentator David Buik, of trading firm Core Spreads, said: ‘It may well be there’s a thin majority for the takeover, but this deal looks to me to be hanging by a thread.
‘Nothing positive has been put to me about this deal, and there is real angst about it among seasoned investors.’
NSF’s key support comes from stock-picker Neil Woodford and money managers Invesco and Marathon, who together own 49 per cent of the Provvy. The trio also have stakes in NSF, which is led by 70-year-old John van Kuffeler, meaning a takeover is in their interests. But NSF has struggled to win backing from other independent shareholders.
It declared victory in the takeover battle a fortnight ago after building support up to 53.53 per cent of Provvy shareholders.
Since then, the company has gained the backing of just 0.01 per cent more.
Expectations for support are now so low that it has been forced to issue fresh paperwork to protect the Provvy’s biggest investors, Woodford and Invesco, from automatically having to launch their own separate takeover bids under company rules after the tie-up completes.
Branding the bid ‘dreadful’, a spokesman for the Provvy said: ‘This is just the latest example of incompetence with which NSF has conducted itself from the moment they launched their shambolic bid back in February. How can they be trusted to run a company eight times their current size, including a bank with 1.8m customers?’
Major investors Schroders, M&G Investments and Coltrane Asset Management, who control 20.2 per cent of the Provvy’s stock, say they will not support the takeover.
It looks to have scuppered the chances of the deal crossing the crucial threshold of 75 per cent support from Provvy investors.
Anything below this level will be enough to formally push through a takeover, but not to merge the two under a single management team. NSF is understood to be running a last-ditch charm offensive to get the deal over the line.
Goodbody analysts said the deal might now not be pushed through on June 5 due to low acceptance levels. The deal still needs to be signed off by regulators at the Financial Conduct Authority and Bank of England by Wednesday next week.