Provvy battles to thwart takeover

DOORSTEP lender Provident Financial could sell some operations or merge with a rival to fend off a hostile takeover.

Chief executive Malcolm Le May insisted all options are being considered as he battles a bid from competitor Non-Standard Finance (NSF).

It came as the Provvy unveiled profits of £90.7m for 2018, up from a £123m loss the previous year, and restarted dividend payments.

Le May said: ‘I’ve delivered on what I said I was going to deliver, and then some. Having said that I will obviously be exploring all avenues to maximise benefits for all of our shareholders.’

The 61-year- old refused to go into detail about what these options might be, and would not say if it is in talks with any other companies.

Asked if mergers or the sale of business units are on the cards, he said: ‘I can’t comment on the specifics. I’ve just got to keep an open mind on what’s in the best interests of all our shareholders.’

NSF is offering Provvy shareholders new stock in a merged company with no premium, meaning that they would not be immediately better off after the deal.

The predator’s bet is that investors will back the turnaround expertise of its chief executive John van Kuffeler, who previously ran the Provvy for 22 years, over the current board.

Shareholders controlling almost 50pc of Provvy stock have said they will support NSF’s bid, but only 29 percentage points of this support is legally irrevocable.

That means investors controlling the other 20pc could switch to backing another bid if the alternative offer was good enough. However, this is unlikely because the three investors behind the holdings – Woodford, Invesco and Marathon – also own NSF stock, so will be the biggest winners from the deal on the table.

The Provvy said it will hand out a dividend of 10p per share.

Shares in the Provvy fell yesterday by 1.5pc, or 8.6p, to 554.6p, while NSF shares dipped 0.2pc, or 0.1p, to 59.5p.