LONDON (dpa-AFX) - Responding to offer for Provident Financial plc (PFG.L) announced by Non-Standard Finance plc or 'NSF' on Friday 22 February, Provident Financial Monday expressed its disappointment at the unsolicited and highly opportunistic approach taken by NSF, including its decision not to engage with the Board prior to the announcement. Provident Financial Board continues to strongly advise Provident Financial shareholders to take no action in respect of the Offer.
Patrick Snowball, Chairman of Provident Financial said, 'The Board of Provident Financial believes that the Offer does not reflect the underlying value of the Company and its prospects. It also has a number of concerns with regard to the Offer, including its all-share nature and the executability of the strategy set out in the Offer. The Board therefore intends to do everything it can to maximise value for all shareholders over the coming weeks and will explore all appropriate alternatives to achieve that objective.'
Provident Financial noted that its board considers that the hostile Offer represents an irresponsible approach in the context of a financially regulated business which is recovering from a period of substantial instability. The Board believed that this Offer could have a negative and destabilising impact on its stakeholders, including its customers, for a considerable period of time.
Provident Financial Board believes that the terms of the Offer do not reflect the underlying value and upside potential of the Company's businesses, the value of which should accrue entirely to all Provident Financial shareholders. The Board also notes that NSF is seeking to obtain control of Provident Financial through a share exchange without offering any strategic premium for a business which is a market leader in its sector.
Provident Financial said its Board does not believe that disposing of Moneybarn at this point in the economic cycle would maximise value for shareholders. The proposed sale or closure of Satsuma would be detrimental and does not recognise its strategic value in light of the significant investment made in the business. The Board believes that the proposed demerger of NSF's Loans at Home business would result in a subscale listed company highly unlikely to maximise value in a public markets context.
Provident Financial Board also questioned the track record of NSF and its ability to execute on their strategy and manage a business of the scale of Provident Financial, which they note is conditional on a post-closing review and subsequent regulatory approval.
Provident Financial noted that NSF is a significantly smaller company than Provident Financial and will have limited senior management bandwidth to undertake such a transformational acquisition and successfully execute the integration.
Provident Financial said trading in the business for 2018 was as outlined in the trading update on 15 January 2019. Current trading continues in line with our expectations. However, in light of the current circumstances the Board believes it is appropriate to delay the announcement of its full-year 2018 results to 13 March 2019.
Copyright RTT News/dpa-AFX
© 2019 AFX News
