Provident Financial rises as NSF pulls hostile takeover bid

Wednesday, 5th June 2019 11:44 - by Rajan Dhall

I had the pleasure of meeting the Provident Financial guys at an investor evening. Now there are many questions about the financial lending industry due to lending practices and collections inefficiencies. Recently there has been talk of an acquisition but Non-Standard Finance (NSF) has ditched plans for a £1.3billion hostile takeover.

The Co. (Provident) stated the withdrawal of the bid was 'in the best interests' of its shareholders and this morning the share price rose 15% to break the 500p barrier and at the time of writing share trade at 516p. So what happened? Janus Henderson, Schroders, Coltrane and M&G all opposed the bid, taking the total opposition to 21.6 per cent of investors.

Since issuing a profit warning shares in Provident dropped significantly. February last year shares were trading just above £8 and this year it seems we have found some consolidation at the £5 area. Now, this is out the way if the issues at the company improve there are some resistance levels in the way that are marked on the chart. Once we are significantly over £5 it could act as an important support level moving forward.