TIDMPFG TIDMNSF
RNS Number : 4335A
Provident Financial PLC
29 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
29 May 2019
Provident Financial plc ("Provident")
Response to announcement from the Competition and Markets
Authority ("CMA")
Provident notes the announcement from the CMA today stating that
it has commenced its investigation into the unsolicited Offer from
Non-Standard Finance plc ("NSF") for Provident and that the
invitation to comment ("ITC") period has commenced.
NSF has acknowledged that the Offer is likely to lead to a
substantial lessening of competition ("SLC") in the home collected
credit industry. As such, the Offer is likely to require a Phase 2
review, unless a suitable remedy is agreed with the CMA.
The Provident Board has raised significant concerns in relation
to NSF's proposed remedy of the demerger of Loans at Home,
including:
-- Loans at Home's viability and sustainability 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 that 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, makes
it more difficult for Loans at Home to engage self-employed
workforces.
Given the formal investigation by the CMA only commenced today,
the Provident Board further notes that it is now beyond any doubt
that such investigation will not be concluded before 5 June 2019,
the latest date for NSF to declare the Offer wholly unconditional.
In order to declare the Offer wholly unconditional, the Provident
Board believes that NSF would need to waive the CMA condition
without knowing whether, or with what remedies, the combination of
Provident and NSF would be approved, leaving Provident Shareholders
exposed to a potential unknown and uncosted remedy, which it
believes would be materially value destructive. Provident
Shareholders will therefore be denied the opportunity to make a
fully informed assessment of the Offer and, as previously
announced, there are serious potential consequences of which
Provident Shareholders should be aware, as follows:
-- if the Offer were completed without CMA approval, the
Provident and NSF groups would be required to be held separate
under independent management for a potentially prolonged period
under the CMA's Initial Enforcement Order ("IEO") of 22 February
2019. In that time, while the two groups are operated separately,
shareholders would not receive any synergy benefits supposedly
offered by the acquisition;
-- there is the additional and very real risk that the CMA will
not find the proposed remedy adequate and consequently refer the
combination of Provident and NSF to a Phase 2 review by the CMA
lasting six months or more. The Takeover Code provides that any
offer that is referred to Phase 2 review prior to the first closing
date, or prior to the offer becoming unconditional as to
acceptances, whichever is the later, automatically lapses. NSF's
approach to the Offer timetable has had the effect of depriving
Provident Shareholders of this protection and has exposed them to
significant uncertainty and downside risk. Furthermore, if the
remedy is not ultimately approved by the CMA, there is a risk that
the combination would have to be unwound, incurring further value
destruction for Provident Shareholders; and
-- the costs associated with these issues will be borne in the
most part by Provident Shareholders: based on the latest level of
acceptances of 53.5 per cent. of Provident Shares assented to the
Offer, former Provident Shareholders would own approximately 79.4
per cent. of the enlarged share capital of NSF, with this
percentage increasing should further Provident Shares be assented
to the Offer
The Provident Board believes that this is a very significant
development, introducing a far greater degree of uncertainty for
the NSF Offer than previously indicated by NSF. The Provident Board
believes that Provident Shareholders are not able to assess or even
estimate the full economic consequences of the NSF Offer and
therefore the NSF board should show due consideration to all
Provident Shareholders by allowing it to lapse.
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
Sources and bases
Unless otherwise stated, as at 29 May 2019:
-- The total issued share capital of Provident is 253,378,601, as at 30 April 2019
-- As disclosed by NSF on 28 May 2019, as at 3:00pm on 24 May
2019, NSF had received valid acceptances for the Offer in respect
of 135,667,870 Provident Shares representing 53.5 per cent. of the
total issued share capital of Provident
-- The assertion that former Provident Shareholders would own
approximately 79.4 per cent of the enlarged share capital of NSF is
calculated by reference to a) the total issued share capital of NSF
of 312,049,682 (excluding 5,000,000 NSF Shares held in treasury),
as at 7 March 2019 and; b) the exchange ratio of 8.88 new NSF
Shares for each Provident Share, as prescribed under the NSF
Offer
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.
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
OFBGLGDUIXDBGCC
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May 29, 2019 02:42 ET (06:42 GMT)
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