Provident Financial bolsters defences against £1.3bn hostile bid
The group said it has ‘substantially resolved’ all of its outstanding regulatory issues.
Doorstep lender Provident Financial has insisted the group has put its regulatory issues behind it and has a “clear plan” for growth as it ramps up its defences against a £1.3 billion hostile bid.
The group reiterated last week’s rejection of rival Non-Standard Finance’s (NSF) takeover offer, which is being spearheaded by boss John van Kuffeler – who was previously chief executive and chairman of Provident.
The group said it has “substantially resolved” all of its outstanding regulatory issues, while it has also completed the search for a new managing director and chairman for its Vanquis Bank unit, both with retail banking and consumer finance experience.
The group’s Vanquis bank and Moneybarn car and van financing arm have been the subject of probes by the Financial Conduct Authority (FCA) into lending practices that have weighed on the company’s profits and share price.
But Provident moved to assure that more than 99% of refunds have been made in relation to the repayment option plan offered by Vanquis that has been subject to an FCA probe.
It added that Moneybarn has made significant progress with the FCA on the redress to be paid to resolve the issues arising from the investigation into affordability.
The group also said that, following full authorisation of its consumer credit division last November, it has now started a voluntary redundancy programme, expected to reduce headcount by about 200 in its central support functions.
Patrick Snowball, chairman of Provident, said: “As stated on February 25, the board believes strongly that the offer made by NSF is not in the interests of all shareholders.
“Its offer undervalues Provident, has major strategic flaws, contains a number of misguided assumptions about the Provident business and includes future plans which we consider to be fraught with execution risk.”
Malcolm Le May, chief executive of Provident, added: “Today’s announcement illustrates how we have put the company’s legacy issues behind us and strengthened our relationship with our customers, regulators and other stakeholders.”
The competition regulator waded into the proposed takeover of Provident Financial by NSF last week.
The Competition and Markets Authority (CMA) issued an initial enforcement order which demands that NSF does not make any move to combine the two businesses while it considers whether to further investigate any potential merger.