Markross121_ No Comments

Doorstep lender Provident Financial receives £1.3bn takeover bid

Provident Financial, the doorstep lender that charges interest rates of 535%, has received a surprise £1.3bn takeover bid from a smaller rival led by its former chief executive.

The unsolicited bid for the “Provvy” from Non-Standard Finance (NSF), run by John van Kuffeler, has the backing of the key shareholder Neil Woodford and others who own more than 50% of the company’s shares.

Provident Financial has 800,000 doorstep borrowers – with loan payments collected weekly from their homes – and another 1.7 million holders of its Vanquis credit card that charges up to 69.9% interest.

Despite the high APRs, Provident Financial is yet to recover from a botched attempt to overhaul its 130-year-old business model by cutting staff numbers and ramping up its use of technology. Its shares plunged by two-thirds on one day in 2017 and last year it reported a £123m loss.

Van Kuffeler said Provident had “lost its way” and revealed it had rejected an approach in 2018. “[We] approached the Provident board with a proposal in January last year. That approach was rebuffed and since then Provident has further lost its way.”

Provident’s only official response so far has been to say it “notes the unsolicited offer for Provident Financial announced this morning … The board’s considered response to the offer will be announced in due course. In the meantime, shareholders are strongly advised to take no action in respect of the NSF offer.”

NSF said if successful it would keep Provident’s doorstep-lending business but sell off “non-core” Satsuma Loans and Moneybarn divisions.

Read More – www.theguardian.com