Provident fights £1.3bn hostile bid with fresh plea to backers

Provident Financial launched a surprise counter-attack to fend off a hostile bid on Wednesday by calling on shareholders who back the £1.3 billion deal to “think again”.

The sub-prime lender, which owns Vanquis Bank, said the nil-premium offer from smaller rival Non-Standard Finance was fraught with risks and could damage the company’s ability to borrow and pay dividends.

Provident also revealed it had found new management for Vanquis Bank, a key concern for shareholders, and bonuses would start again for doorstep lending agents. The withdrawal of bonuses has dragged performance.

The Bradford-based firm, which has 2.5 million customers and 4000 employees, has been battered over the past two years following a spate of regulatory investigations and management changes, triggering the NSF bid.

Provident’s top two investors Neil Woodford and Invesco, who own shares in both companies, back the deal but Provident boss Malcolm Le May is hoping for a change of heart.

He said: “I hope this will make even those shareholders who first thought this was a good idea to consider again.

“Since no one came to speak to us before this was launched maybe they should look at what we’re saying today and think again. It might suit some of our shareholders, it does not suit all of our shareholders.”

Le May said he would be speaking to all shareholders hoping to sway them to reject the NSF offer.

Provident had been widely expected to lay out a defence to the NSF next week when it presents annual results. NSF is also reporting annual results next week.

NSF hit back and said Provident’s board lacked banking experience.

“The announcement simply tells long-suffering Provident Shareholders that they will get more of the same from an inexperienced team,” it said.

NSF chief executive John van Kuffeler added that Provident’s defence was “nothing more than empty promises and hollow words.”