Publication of Response Document
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
23 March 2019
Provident Financial plc (“Provident”)
Publication of Response Document
The board of Provident (the "Provident Board") announces that it is today publishing its response document (the "Response Document") in connection with the unsolicited offer for Provident made by Non-Standard Finance plc ("NSF") (the "Offer").
The Provident Board reiterates its belief that NSF’s nil-premium Offer is not in the best interests of all Provident Shareholders. It is strategically and financially flawed and presents significant risk in terms of both execution and shareholder value. The Provident Board is committed to maximising value for all Provident Shareholders and will explore all appropriate alternatives to achieve this objective. In particular, the Provident Board believes that:
- The NSF proposal has significant flaws and would have long-lasting, detrimental consequences for Provident Shareholders and customers;
- NSF has not undertaken transactions of this size and complexity and its track record is one of significant value destruction;
- Provident has been delivering on the objectives set out in early 2018 which include, the Board believes, substantially resolving material outstanding regulatory issues with the FCA, providing sound foundations for future growth and value creation, and strengthening its board governance and structure;
- Provident’s results for 2018 are testament to the successful turnaround the group has made over the past 18 months, having delivered growth of 82.3 per cent in 2018 on a pro forma IFRS 9 basis, and a final dividend of 10 pence per share; and
- Provident has a clear strategy to deliver attractive and sustainable shareholder returns and good customer outcomes in an evolving industry and regulatory environment by implementing a number of planned growth and efficiency initiatives across each of the divisions.
Subject to regulatory approvals, we have reached agreement to appoint a new Vanquis Bank Managing Director, Neil Chandler, joining on 15 April 2019, and also a new Vanquis Bank Chairman, Robert East. Robert East will also join the Provident Board as a Non-Executive Director alongside Graham Lindsay, who will replace John Straw (with effect from 21 May 2019), and whose appointment as a Non-Executive Director to the Provident Board we are pleased to announce with effect from 1 April 2019. All three appointees have a wealth of retail banking and consumer lending experience.
Taking into account all of the above factors, the Provident Board strongly advises all Provident Shareholders to take no action in relation to the risky and flawed NSF Offer.
Patrick Snowball, Chairman of Provident said:
“The Provident Board believes that NSF’s hostile Offer represents an irresponsible approach in the context of a regulated business which is emerging from a period of substantial instability. As such, the Offer would have a negative and destabilising impact on Provident stakeholders, including its customers, for a considerable period of time. The Provident Board believes that the Offer would be value destructive and that the arguments put forward by NSF do not take into account the significant operational progress made by Provident’s management team. Accordingly, the Provident Board unanimously believes the Offer is not in the best interests of Provident Shareholders or customers and should be firmly rejected.”
Malcolm Le May, Chief Executive Officer, Provident Financial said:
“Having stabilised the group, the management team is in the process of developing and implementing a number of planned growth and efficiency initiatives across each of its divisions. We are at an inflection point for the group, as customer needs are changing, the digital business models are challenging old operating approaches, and the regulatory environment is constantly evolving. The Provident Board believes that Vanquis Bank will be the biggest part of the group and its ability to maximise the value in the crossover of its customers with Moneybarn will be important going forward. Against this backdrop, we have a clear strategy and vision for the group and its divisions.
In accordance with Rule 25.1(c)(i) of the Takeover Code, a copy of the Response Document will be made available on Provident's website at www.providentfinancial.com. A copy of the Response Document has been submitted to the National Storage Mechanism and will shortly be made available for inspection at www.morningstar.co.uk/uk/NSM/.
Capitalised terms used but not defined in this announcement shall have the meaning given to them in the Response Document.
Provident, 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
J.P. Morgan Cazenove (Joint Lead Financial Adviser and Corporate Broker to Provident)
Ed Byers, Tel: +44 20 7742 4000
Jefferies (Financial Adviser to Provident)
Graham Davidson, Tel:+44 20 7029 8000
Brunswick (PR Adviser to Provident)
Nick Cosgrove, Tel: +44 20 7404 5959
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.
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.