Investors including Woodford Investment Management and Invesco have agreed to accept an offer for sub-prime lender Provident Financial as a £1.3bn bid for the company has been placed by a competitor.
Non-Standard Finance has tabled the offer, and says investors owning more than 50 per cent of Provident’s shares have given “irrevocable undertakings” to accept it, the BBC reports.
Provident, which owns brands including Satsuma Loans, Vanquis Bank and car finance arm Moneybarn, has been a drag on star manager Neil Woodford’s performance over the past few years, having issued a series of profit warnings in 2017.
Shareholders in Provident will retain an 87.8 per cent stake in the combined business, which is valued at 511 pence a share and would involve shareholders receiving 8.88 new shares in NSF if the bid goes through.
NSF intends to demerge its home credit business, Loans at Home, to allay fears over competition rule breaches.
The BBC quotes NSF’s founder John van Kuffeler as saying: “This transaction will create a market leader in the non-standard finance sector with a strong position in all four main segments…We have recognised the strong logic and value creation potential of a combination with Provident for some time and hence approached the Provident board with a proposal in January last year. That approach was rebuffed and since then Provident has further lost its way”.