THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
Provident Financial plc (Provident or the Company) today announces its intention to conduct a placing of new ordinary shares in the Company (the Placing Shares) to raise approximately £120 million of gross proceeds representing approximately 4.1% of the Company's market capitalisation as at 13 August 2014 (the Placing).
The Placing is being conducted through an accelerated bookbuilding process (theBookbuild) which will be launched immediately following this announcement. J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove (J.P. Morgan Cazenove), is acting as bookrunner in connection with the Placing.
Funds managed by Invesco Asset Management Limited (Invesco) which currently hold 27.0 million shares in the Company, representing 19.2% of the issued share capital, have confirmed that, as of the date of this announcement, they support the Placing and intend to participate. This intention is however non-binding and may change at their discretion.
The Company has separately announced today that it has entered into an agreement to acquire the entire issued share capital of Duncton Group Limited for £120 million (the Acquisition). Duncton Group Limited and its subsidiaries (Moneybarn) operate under the Moneybarn brand, and together form the UK's largest non-standard vehicle finance group.
Use of Proceeds
The net proceeds of the Placing are proposed to be used to fund a significant proportion of the consideration for the Acquisition with the residual balance being funded through existing cash resources of the Company. As at 30 June 2014, the Company had headroom on its committed facilities of £307 million, which is more than sufficient to cover the residual funding requirement for the Acquisition.
Rationale
Founded in 1992, Moneybarn provides car finance to non-standard customers in the UK, operating mainly through brokers with additional distribution sourced through independent car dealers and from its website directly to customers. The business offers secured car loans, predominantly through conditional sale agreements and with the car typically used for necessity such as travel to work rather than for luxury or discretionary purposes.
The acquisition of Moneybarn broadens the product offering to the group's target customer base and creates a third leg of earnings that complements the organic growth opportunities available to the group. Moneybarn's origination has been muted recently, given funding constraints, and this leaves scope for growth going forward. The board believes that the business is highly scalable, given the strength of broker relationships and market leading credit decisioning, combined with the strength of the Provident group's balance sheet. Potential opportunities for synergies with the group's existing businesses, including enhancements to underwriting and collections capabilities, the development of a business-to-consumer proposition and leveraging the Vanquis Bank customer base, will be evaluated post acquisition.
The Placing
The Bookbuild will open with immediate effect following this announcement. The number of Placing Shares and the price at which the Placing Shares are to be placed (the Placing Price) will be agreed by J.P. Morgan Cazenove, and Provident at the close of the Bookbuild. The timing of the closing of the Bookbuild, pricing and allocations are at the discretion of J.P. Morgan Cazenove and Provident. Details of the Placing Price and the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild.
The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company.
Application will be made for the Placing Shares to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority (the Official List) and to trading on the main market of the London Stock Exchange plc (together, Admission). It is expected that settlement for the Placing Shares and Admission will take place at 8.00 a.m. on 19 August 2014. The Placing is conditional upon, amongst other things, Admission becoming effective and upon the placing agreement between the Company and J.P. Morgan Cazenove (thePlacing Agreement) not being terminated. Further details of the Placing Agreement can be found in the terms and conditions contained in the Appendix to this announcement
Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this announcement (which forms part of this announcement).
By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.
Enquiries
PROVIDENT FINANCIAL PLC
Media
David Stevenson, Provident + 44 (0) 1274 351 351
Simone Selzer, Brunswick Group + 44 (0) 2074 045 959
Investor Relations
Gary Thompson, Provident
investors@providentfinancial.com + 44 (0) 1274 351 351
J.P. MORGAN CAZENOVE +44 (0) 20 7742 4000
Piers Davison
Greg Chamberlain
Kamalini Hull
Charlie Walker
Invesco is under no obligation to update, revise or re-affirm its current intention. Any final decision to invest will be made solely in Invesco's absolute discretion.
This announcement including its Appendix (together, the Announcement) and the information contained in it is restricted and is not for publication, release or distribution, in whole or in part, directly or indirectly, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia, together the United States), Australia, Canada, Japan or South Africa or any other state or jurisdiction in which publication, release or distribution would be unlawful, restricted or unauthorised (each a Restricted Territory). This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of the Company in any Restricted Territory or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Subject to certain exemptions, the securities referred to in this Announcement may not be offered or sold in any Restricted Territory or for the account or benefit of any national resident or citizen of any Restricted Territory. The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to registration under the Securities Act or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold in the United States only to a limited number of “qualified institutional buyers” (QIBs) in reliance on Rule 144A under the Securities Act or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and are being offered and sold outside the United States in offshore transactions in accordance with Regulation S under the Securities Act. No public offering of the shares referred to in this Announcement is being made in the United Kingdom, any Restricted Territory or elsewhere.
This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by J.P. Morgan Cazenove or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
J.P. Morgan Cazenove is authorised and regulated by the Financial Conduct Authority in the United Kingdom. J.P. Morgan Cazenove is acting solely for the Company and no one else in connection with the Placing and it will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Placing and/or any other matter referred to in this Announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Cazenove by the Financial Services and Markets Act 2000 or by the regulatory regime established under it, neither J.P. Morgan Cazenove nor any of its affiliates accepts any responsibility whatsoever for the contents of the information contained in this Announcement or for any other statement made or purported to be made by or on behalf of J.P. Morgan Cazenove or any of its affiliates in connection with the Company, the Placing Shares or the Placing. J.P. Morgan Cazenove and its affiliates accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by J.P. Morgan Cazenove or any of its affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or J.P. Morgan Cazenove that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and J.P. Morgan Cazenove to inform themselves about, and to observe, such restrictions.
The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained in it. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.