Provident Financial PLC (LON:PFG) has once again reiterated its opposition to a “risky and flawed” hostile offer from Non-Standard Finance PLC (LON:NSF) as it reshuffled the leadership of its credit card division, Vanquis Bank.
In a response to NSF’s offer, published on Saturday, the sub-prime lender's chairman Patrick Snowball said a takeover would have a “negative and destabilising impact” on stakeholders and customers and should be “firmly rejected”.
READ: Provident Financial swings to profit and resumes dividend as it seeks to fend off hostile takeover
“The Provident board believes that the offer would be value destructive and that the arguments put forward by NSF do not take into account the significant operational progress made by Provident's management team”, he added.
In a response to the…response, NSF chief executive John van Kuffeler, who previously served as Provident’s chief executive (CEO) and chairman for 22 years, said PFG’s management had “no credible vision for the future” and urged its shareholders to accept NSF’s offer.
“Growth is underwhelming, customers and management are leaving, central costs are rising and numerous regulatory issues still exist across the Provident group”, Kuffeler said.
“We, therefore, urge shareholders to accept our offer without delay so that we can get on with the job of ending this difficult period for Provident by restoring the business culture, fixing Provident's self-inflicted problems and unlocking substantial value for shareholders."
Kuffeler also turned his guns on Provident’s incumbent CEO Malcolm Le May, saying he had “let down Provident shareholders in his almost four years as senior independent director” and questioned what his tenure said about the current board.
NSF originally swooped in with its hostile bid for the much larger Provident back in February in a coup that is currently backed by investors representing 49.4% of Provident’s shares.
The offer, which values Provident at around £1.3bn, has provoked particular ire from the company’s management as it offers no premium on the current market cap.
PFG has been rocked over the last year after Vanquis was hit with a £172.1mln fine relating to its repayment option (ROP) plan after an investigation from the Financial Conduct Authority (FCA).
The hefty bill, coupled with a massive swing to a £123mln loss in 2017 from a £343.9mln profit the year before, meant the firm had to go cap in hand to investors for a whopping £300mln in a steeply discounted rights issue in order to stabilise its finances.
The group has recently been trying to sweeten the deal for its investors by reinstating its final dividend in its full-year results in mid-March while also trumpeting a swing to a £90.7mln pre-tax profit in 2018 from the massive loss the year before.
New Vanquis leadership
In a separate announcement, PFG said it had appointed Neil Chandler, the former chief executive of Sainsbury’s Bank and Shop Direct Financial Services, as managing director of Vanquis Bank from 15th April.
The company added that it had also brought Robert East, chairman of Skipton Building Society, on board as Vanquis’ chairman and non-executive of Provident.
Graham Lindsay, a member of the board of payday lender Wonga UK, would also join PFG as a member of its audit, group risk, remuneration and nominations committees.
In early trading Monday, Provident shares were down 1% at 517.6p, while NSF shares were flat at 57.2p.