Schroders stands firm against Non-Standard Finance’s hostile takeover of Provident

A major Provident shareholder has stood firm against a £1.3bn hostile takeover bid delivering a blow to rival subprime lender Non-Standard Finance’s hopes of gaining more support.

NSF decided to plough ahead with its takeover last week with support from investors holding 53.53 per cent of Provident shares.

The doorstep lender dropped its own target number of acceptances from 90 per cent to just 50 per cent in order to push the deal through.

Provident hit back and said the deal was “not done” and analysts said NSF needed more support or risked facing a struggle to execute its strategy.

But Provident’s third-largest shareholder Schroders has dealt a blow to the firm’s prospects of attracting more support before declaring the offer wholly unconditional on 5 June.

The UK fund manager, which holds a 14.6 per cent stake in Provident, told City A.M. it remained opposed to the bid.

Three Provident shareholders – Neil Woodford, Invesco and Marathon – make up more than 50 per cent of NSF’s support.

The trio also hold shares in NSF and Schroders said it was concerned the rights of minority shareholders were not being protected.

“We remain of the view that it is in the best interests of those Provident shareholders, who are not also shareholders in NSF, to reject the offer and continue to hold premium listed Provident stock, confident in the protection for minority shareholders that this provides,” fund manager Kevin Murphy said.

A row over Provident chief executive Malcolm Le May’s pay intensified yesterday as shareholder advisory group ISS urged investors to vote against the company’s remuneration report.

Le May was paid a £573,000 bonus in 2018 and took home a total of £1.38m despite two profit warnings and shares falling 13 per cent over the year.

ISS said annual bonuses were not “fully aligned with the company’s performance.”