Doorstep lender Provident faces £1.3bn hostile bid from ex-boss van Kuffeler

Provident Financial’s former chairman launched a stunning £1.3 billion coup for the crisis-hit doorstep lender on Friday, backed by top investors including fund manager Neil Woodford.

John van Kuffeler, head of smaller rival Non-Standard Finance (NSF), shocked the market by orchestrating a hostile takeover through NSF backed by shareholders who own more than half of Provident’s shares.

There is no premium to the all-share offer, worth 511p, but shares rose 4% to 529.8p suggesting the market thinks a higher offer could be on the cards.

The move comes after a disastrous period for Provident, following a wave of profit warnings, regulatory headaches and the death of former executive chairman Manjit Wolstenholme.

Van Kuffeler, who spent more than two decades at Provident as chief executive and chairman, said there was “irrefutable industrial logic” to the deal.

“This is a business I know incredibly well,” he said, adding that the Provident board, chaired by Patrick Snowball, was “not experienced in the sector”.

The proposed all-share takeover, comprised of 8.88 NSF shares for every one Provident share, will effectively transplant the NSF management team into the driving seat at Provident.

Provident, known as “the Provvy” by customers, was working on a response to the offer with its bankers at Barclays and JP Morgan on Friday.

Van Kuffeler said NSF had approached the board in January 2018 but had been rebuffed.

Woodford’s fund management company, Invesco and Marathon Asset Management — founded by well-known fund manager Jeremy Hosking — backed the offer. They are also shareholders in Non-Standard Finance.

Investors have been increasingly frustrated with the slow pace of turnaround at Provident. A profit warning in January — the third in 18 months — prompted many to lose faith with the current management.