Provident Climbs as Woodford-Backed NSF Abandons Hostile Bid

(Bloomberg) -- Provident Financial Plc’s shares jumped after it welcomed the end of a hostile bid from Non-Standard Finance Plc, the smaller U.K. subprime lender backed by beleaguered investor Neil Woodford.

NSF has decided to let its offer for Provident lapse, according to a statement Tuesday, confirming an earlier report by Bloomberg News. Provident, which had resisted the approach since it was first unveiled in February, said on Wednesday the outcome was in the best interests of shareholders.

Provident shares rose as much as 11%, the most since February. NSF’s shares dropped about 2.7% in early morning trade in London. Provident said in its statement the failed takeover offer had been an “unnecessary distraction” and that it regretted the “cost and impact of the uncertainty” on Provident’s customers and staff.

NSF made an unsolicited offer in February for Provident worth about 1.3 billion pounds ($1.7 billion), and its deadline for getting shareholder approval had already been extended.

“I am very disappointed that despite our best efforts customers, employees and shareholders will not now benefit from our transformation plan to build a brighter future by combining Provident with NSF,”John van Kuffeler, NSF’s Chief Executive, said in its statement.

Recent troubles faced by Woodford -- a key supporter of the deal whose funds are investors in both companies -- had made pursuing the transaction more difficult, according to people familiar with the matter who declined to be identified because the details aren’t public.

Woodford, once one of the U.K.’s most celebrated money managers, froze redemptions in his flagship fund on Monday after a string of losses prompted a flurry of investor withdrawals. The halt buys him time to offload “unquoted and less liquid stocks” and shift into more readily traded investments, his firm said.

That complicated a deal that was already facing resistance from several Provident shareholders including Janus Henderson Group Plc, M&G Investments and Schroders Plc. The U.K. Competition and Markets Authority had also said it was reviewing the transaction, which had been accepted by some 53.5% of Provident’s investors.

Provident has a market capitalization of about 1.2 billion pounds, while NSF is valued at about 147 million pounds.

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