The chairman of takeover target Provident has accused suitor Non-Standard Finance of “unlawful” activity and urged shareholders to take no action over the “dreadful deal” on the table.
Patrick Snowball said in a letter to shareholders that NSF’s £1.3 billion offer for the firm resembles “more of a coup d’etat than a hostile takeover”.
It is the latest criticism levelled by the sub-prime lender at its smaller rival, and Mr Snowball on Tuesday took aim at dividends paid by NSF, saying they contravened the Companies Act.
“They were described by NSF as ‘technical infringements’ but the simple fact and truth of the matter is that they were unlawful.
“These unlawful distributions are a telling indictment of the competency of the NSF team and the weak oversight of their board and must call into question their ability to run a business some seven times larger than their own and one which includes a regulated bank.”
Last Friday, NSF said, following a review, it had identified “certain technical infringements” regarding historic distributions made by the company.
NSF has acceptances for over 50% of Provident’s shares, including from Woodford Investment Management, Invesco Asset Management and Marathon Asset Management, who together hold a 49% stake in Provident.
On Tuesday afternoon, NSF accused the Provident board of living in a “different world” and having an “extraordinary disregard” for some of its largest shareholders.
NSF boss John van Kuffeler said: “It (Provident) continues to celebrate ‘the substantial progress over the past 18 months’ – a period in which Provident has had to be rescued by a rights issue, has issued a profits warning, has had an ‘irresponsible’ advertising campaign banned and has paid out over £170 million in customer redress in one business division, whilst dealing with a regulatory investigation in another and a 200% increase in the number of new complaints to the Financial Ombudsman Service in a third.
“Is this how the Provident Board measures success?”
Provident, which owns Vanquis Bank and Moneybarn, has insisted it is continuing to explore “all appropriate alternatives” to maximise value for shareholders and continues to advise its shareholders to “take no action”.
The CMA is currently investigating the deal and the FCA has also raised concerns.