A Subprime Lender Tries the Ultimate Cutthroat Deal
A bid for Provident Financial from a tiny rival would usually be laughed out of town. But the target’s damaged credibility means it is vulnerable.
Subprime lenders don't mess around. One is trying to take over another that's seven times bigger -- without paying a premium.
Photographer: Dan Kitwood/Getty Images EuropeIt would usually be laughed out of town. A hostile bid with no takeover premium for a company that’s seven times bigger, in one of the most controversial parts of U.K. financial services: Subprime lending. Non-Standard Finance Plc’s attempted takeover of Provident Financial Plc exploits a gaping hole in the credibility of the target’s management.
NSF is led by former Provident CEO John van Kuffeler. He failed with a friendly approach to Provident last year. Back then, the latter was in a troubled state after a botched change of business model, moving from using agency debt collectors to in-house staff. Its shares are even lower today. This time, Van Kuffeler is aggressively making a formal offer with the support of big shareholders who own chunks of both companies – including half the Provident register.