Ailing Provident Financial hits out at hostile £1.3 billion bid

Beleaguered doorstep lender Provident Financial on Monday blasted a £1.3 billion hostile takeover bid as “irresponsible” and said it could hurt customers.

The crisis-hit company formally rejected a 511p bid from smaller rival Non-Standard Finance, which has support from over 50% of Provident’s shareholders.

Chief executive Malcolm Le May said NSF’s plan to break up Provident would lead to a worse service for customers and he claimed NSF’s team were not up to scratch to lead the business.

He said: “Their plan is poor for long-term shareholder value and for our customers. I’m not sure their plan is capable of long-term implementation. I have a better perspective on what life is looking like on the inside than the outside.”

NSF, led by former Provident chief and chairman John van Kuffeler, plans to sell off Provident’s car finance division Moneybarn and close down online lending business Satsuma.

Former Co-op Bank chief executive and NSF non-executive director Niall Booker would also be made chairman of credit card unit Vanquis Bank.

Former banker Le May said breaking up the group was “not the right option” because of the overlap between customers who use Vanquis and Moneybarn.

“I’m concerned for all of our customers. You can’t pick and choose the product you offer.

“You have to offer them the right product rather than just what’s on your shelf. There’s huge overlap between Vanquis and Moneybarn.”

Provident delayed annual results, due on Wednesday, for two weeks today to give itself “more time” to mount a defence but said trading is in line with City forecasts.

The company promised to “maximise value for all shareholders” over the next few weeks.

Le May said he was “open-minded” about what to do next.

He declined to say whether Provident Financial had its own break-up plan or was searching for a white-knight suitor.

Provident, based in Bradford, was an FTSE 100 giant until a botched IT upgrade in 2017 and regulatory pressures destroyed 80% of the company’s value.

Its largest two shareholders, Neil Woodford and Invesco, have lost faith following a January profit warning and back the NSF all-share offer.