TIDMPFG TIDMNSF
RNS Number : 1767Z
Provident Financial PLC
15 May 2019
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
FOR IMMEDIATE RELEASE
15 May 2019
Provident Financial plc ("Provident")
92 per cent. of shares held by Independent Shareholders have not
been assented to the Offer
-- The Provident Board notes that Non-Standard Finance plc
("NSF") has today taken the technical step of declaring its Offer
unconditional as to acceptances. However, the Offer remains subject
to a number of material conditions. We also note that:
o in aggregate, 92 per cent. of shares held by Independent
Shareholders have not been assented to the NSF Offer;
o valid acceptances have been received in respect of a total of
only 135,657,017 Provident Shares as at 1.00pm (London time) on 15
May 2019, representing only 53.5 per cent of the voting rights of
Provident, which represents a level of acceptances insufficient to
delist Provident or to commence the compulsory acquisition
procedure; and
o such acceptances represent an incremental increase of only 4
per cent. in the 12 weeks since NSF launched its unsolicited,
nil-premium, Offer.
Important conditions including the FCA, PRA and CMA yet to be
satisfied or waived
-- Provident notes that regardless of today's announcement the
Offer remains conditional on the satisfaction or waiver of
important conditions, including receipt of approvals from the FCA,
the PRA and the CMA.
o As of 14 May 2019, the CMA had not commenced its Phase 1
review and consequently it is extremely unlikely that the CMA will
make a decision on or before 5 June 2019.
o Accordingly, if the FCA and PRA were to approve the change of
control, NSF will have a choice on 5 June 2019 as to whether or not
to waive the CMA condition and close its value destructive Offer.
In the event that NSF were to declare the Offer wholly
unconditional, Provident Shareholders should note that NSF has
undertaken to keep its Offer open for acceptance for a period of at
least seven days from the date that the Offer is declared wholly
unconditional.
o The level of acceptances received (or lack thereof) at that
point may be a critical consideration for NSF. The Provident Board
therefore continues to urge Independent Shareholders to take no
action and not to accept the Offer.
Unanswered questions and substantial concerns of this uncertain,
conditional and bad deal
-- In addition, NSF has still not provided satisfactory answers
to the Provident Board's key questions and the Provident Board
continues to have very substantial concerns about the Offer,
including:
o the viability and sustainability of Loans at Home as a
standalone business, the cost of demerging Loans at Home with
sufficient capital to fund itself on a debt-free basis and the
possibility of the Government's Good Work Plan, which sets out
wide-ranging proposals for fundamentally changing the way
businesses engage with flexible and semi-flexible workforces,
making it more difficult for businesses like Loans at Home to
engage self-employed workforces;
o the potential under-capitalisation of the enlarged group as a
result of the combination with NSF and demerger, and particularly
where a minority interest remains in place in the group;
o the impact of the FCA's review of high cost credit and
additional focus on firms providing guarantor lending on the future
profitability of NSF's guarantor loans businesses;
o the closure of Satsuma and curtailment of Provident's digital
strategy to achieve better customer outcomes; and
o the funding; ratings, balance sheet and earnings impacts of
the above points and specifically from NSF's proposed sale of
Moneybarn.
-- If the Offer were to become wholly unconditional but NSF were
not to receive sufficient acceptances to compulsorily acquire
Provident Shares held by non-assenting Provident Shareholders, the
above factors relating to Loans at Home, under-capitalisation of
the enlarged group and NSF's guarantor loans businesses may affect
NSF's ability to fully pass through to NSF shareholders dividends
received from Provident. Whereas, the dividends paid to continuing
Provident Shareholders would be unaffected by these factors.
-- The Provident Board believes that the strategic and financial
flaws associated with the NSF Offer clearly demonstrate that
Provident Shareholders would be better off not assenting their
shares to the Offer.
-- The Provident Board reiterates the continued progress in
rebuilding the Group and in delivering a clear vision for the
future, as laid out in Provident's Trading Statement and Vision for
the Future, published on 3 May 2019.
The Provident Board therefore re-confirms that it continues not
to recommend the Offer and strongly advises all Provident
Shareholders to continue to take no action in relation to the NSF
Offer.
"Shares held by Independent Shareholders" means the Provident
Shares other than those held by Woodford Investment Management
Limited, Invesco Asset Management Limited and Marathon Asset
Management LLP for which they provided irrevocable undertakings and
letters of intent to accept the Offer as at 15 May 2019 and
Independent Shareholders shall be construed accordingly.
Unless otherwise defined, all capitalised terms in this
announcement shall have the meaning given to them in the response
document published on 23 March 2019.
Enquiries
Provident Financial plc, Tel: +44 12 7435 1135
Patrick Snowball, Chairman
Malcolm Le May, Chief Executive Officer
Gary Thompson / Vicki Turner, Investor Relations, Tel: +44 12
7435 1900
Richard King, Media, Tel: +44 20 3620 3073
Barclays (Joint Lead Financial Adviser and Corporate Broker to
Provident)
Richard Taylor, Tel: +44 20 7623 2323
Kunal Gandhi
Francesco Ceccato
Derek Shakespeare
J.P. Morgan Cazenove (Joint Lead Financial Adviser and Corporate
Broker to Provident)
Ed Byers, Tel: +44 20 7742 4000
Jeremy Capstick
Claire Brooksby
James Robinson
Jefferies (Financial Adviser to Provident)
Graham Davidson, Tel: +44 20 7029 8000
Philip Noblet
Barry O'Brien
Brunswick (PR Adviser to Provident)
Nick Cosgrove, Tel: +44 20 7404 5959
Charles Pretzlik
Simone Selzer
Further Information
Barclays Bank PLC, acting through its Investment Bank
("Barclays"), which is authorised by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the
Financial Conduct Authority (the "FCA") and the PRA, is acting
exclusively as corporate broker and financial adviser for Provident
and no one else and will not be responsible to anyone other than
Provident for providing the protections afforded to clients of
Barclays nor for providing advice in relation to any matter
referred to in this announcement.
J.P. Morgan Securities plc, which conducts its UK investment
banking business as J.P. Morgan Cazenove, is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom. J.P.
Morgan Cazenove is acting exclusively as corporate broker and
financial adviser to Provident and no one else in connection with
the matters set out in this announcement and will not regard any
other person as its client in relation to the matters set out in
this announcement and will not be responsible to anyone other than
Provident for providing the protections afforded to clients of J.P.
Morgan Cazenove or its affiliates, or for providing advice in
relation to the contents of this announcement or any other matter
referred to herein.
Jefferies International Limited ("Jefferies"), which is
authorised and regulated in the United Kingdom by the FCA, is
acting for Provident and no one else in connection with the matters
set out in this announcement. In connection with such matters,
Jefferies will not regard any other person as their client, and
will not be responsible to anyone other than Provident for
providing the protections afforded to clients of Jefferies or for
providing advice in relation to the contents of this announcement
or any other matter referred to herein. Neither Jefferies nor any
of its subsidiaries, affiliates or branches owes or accepts any
duty, liability or responsibility whatsoever (whether direct,
indirect, consequential, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of
Jefferies in connection with this announcement, any statement
contained herein or otherwise.
Forward looking statements
This announcement may contain certain "forward looking
statements" regarding the financial position, business strategy or
plans for future operations of Provident. All statements other than
statements of historical fact included in this document may be
forward looking statements. Forward looking statements also often
use words such as "believe", "expect", "estimate", "intend",
"anticipate" and words of a similar meaning. By their nature,
forward looking statements involve risk and uncertainty that could
cause actual results to differ materially from those suggested by
them. Much of the risk and uncertainty relates to factors that are
beyond Provident's ability to control or estimate precisely, such
as future market conditions and the behaviours of other market
participants, and therefore undue reliance should not be placed on
such statements which speak only as at the date of this document.
Provident does not assume any obligation to, and does not intend
to, revise or update these forward looking statements, except as
required pursuant to applicable law or regulation.
Important Notices
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in restricted
jurisdictions, on the Provident website at
www.providentfinancial.com by no later than 12 noon (London time)
on the business day following this announcement. For the avoidance
of doubt, the content of this website is not incorporated by
reference into, and does not form part of, this announcement.
This communication is not intended to and does not constitute an
offer to buy or the solicitation of an offer to subscribe for or
sell or an invitation to purchase or subscribe for any securities
or the solicitation of any vote in any jurisdiction. The release,
publication or distribution of this communication in whole or in
part, directly or indirectly, in, into or from certain
jurisdictions may be restricted by law and therefore persons in
such jurisdictions should inform themselves about and observe such
restrictions.
Bases and Sources
Unless otherwise stated, as at 15 May 2019:
-- The total issued share capital of Provident is 253,378,601
-- The total shares provided under irrevocables and letters of
intent in aggregate by Woodford Investment Management Limited,
Invesco Asset Management Limited and Marathon Asset Management LLP
is 125,097,841
-- The total aggregated shares held by Independent Shareholders
is 128,280,760, such figure being calculated by deducting the
aggregate shares provided under irrevocables and letters of intent
by Woodford Investment Management Limited, Invesco Asset Management
Limited and Marathon Asset Management LLP as at 15 May 2019 from
the total issued share capital of Provident
-- As per NSF's announcement on 15 May 2019, NSF had received
valid acceptances for the Offer in respect of 135,657,017 Provident
Shares representing 53.5 per cent. of the total issued share
capital of Provident as at 1.00pm (London time) on 15 May 2019
-- The number of shares therefore assented to the Offer by
Independent Shareholders is 10,559,176, such figure being
calculated by deducting the shares provided under irrevocables and
letters of intent by Woodford Investment Management Limited,
Invesco Asset Management Limited and Marathon Asset Management LLP
as at 15 May 2019 from the valid acceptances received
-- The assertion that 92 per cent. of shares held by Independent
Shareholders have not been assented to the Offer is by reference to
(i) the total aggregated shares held by Independent Shareholders of
128,280,760 and (ii) the number of shares assented to the Offer by
Independent Shareholders of 10,559,176
-- The assertion that NSF has only been able to secure
approximately 4 per cent. incremental acceptances from Provident
Shareholders beyond those committed at time of launch is by
reference to (i) the total irrevocables and letters of intent
committed by Woodford Investment Management Limited, Invesco Asset
Management Limited and Marathon Asset Management LLP as at 15 May
2019 of 125,097,841, and (ii) the total share capital of Provident
at 15 May 2019 of 253,378,601
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
OFBUVONRKKAVAAR
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May 15, 2019 12:46 ET (16:46 GMT)
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