LONDON (Alliance News) - Non-Standard Finance PLC responded Tuesday to Provident Financial PLC Chair Patrick Snowball's letter, saying Provident is "determined to deflect from its history of self-inflicted wounds and incompetence".
Snowball issued a letter to shareholders earlier Tuesday urging them to take no action over smaller peer Non-Standard Finance's "dreadful deal".
Snowball wanted to convey his personal views on Non-Standard Finance's "silence" on the questions raised by Provident.
He said: "I find this silence telling, particularly when it relates to straightforward questions regarding the future management of Vanquis Bank (which would be the largest business within the enlarged group), the implications of selling Moneybarn on the broader Provident group or the genuine challenges of addressing the concerns for the UK Competition & Markets Authority.
"On this latter point, NSF's failure to make progress with their CMA submission creates further disruption for the business and yet more uncertainty for our shareholders."
Non-Standard Finance responded later Tuesday and said Snowball's letter "once again showed Provident's defective leadership, customer failings, destruction of shareholder value, erosion of shareholder trust and strategic vacuum".
Snowball believes Non-Standard Finance's offer is "still the same dreadful deal it was on day one".
He added: "It is more of a coup d'etat than a hostile takeover, spearheaded by a management team at Non-Standard Finance with a track record of value destructive acquisitions and facilitated by two powerful shareholders."
Non-Standard Finance said this language revealed an "extraordinary disregard for some of its largest shareholders", who Non-Standard Finance said are "experienced investors who, having seen the Provident and Non-Standard Finance teams first-hand, have chosen the Non-Standard Finance proposition and accepted our offer".
Non-Standard Finance has received valid acceptances from 128.5 million Provident shares, equivalent to 51% of Provident's issued capital. However, it would need acceptances from 90% of shareholders for a successful takeover.
Non-Standard Finance continued, saying Snowball's letter "evidences an absurd and misplaced pride in its failings", which included "congratulating itself for a year in which it had to be rescued by a rights issue and which was shortly followed by a profit warning, the third overseen by [Chief Executive] Malcolm Le May in his time at Provident".
"The announcement reinforces what we have been saying - the Provident board combines a chief executive who was at the heart of Provident's catastrophic recent mismanagement with an ill-equipped wider board, the majority of whom, including the chair, have less than a year's experience with Provident and lack successful operational experience in non-standard finance and many of whom have been associated with past failings elsewhere," added Non-Standard Finance.
Non-Standard Chief Executive John van Kuffeler said: "The Provident board appears to be living in a very different world from its customers, employees and shareholders."
Provident, an unsecured sub-prime lender, has on several previous occasions criticised the GBP1.3 billion hostile offer, made in February, from smaller rival Non-Standard Finance - but Snowball noted Non-Standard Finance addressed one concern raised by Provident last Friday.
Provident have raised concerns over certain dividends paid by Non-Standard Finance since 2015, saying they contravened the Companies Act.
Last Friday, Non-Standard Finance said, following a review, it had identified "certain technical infringements" regarding historic distributions made by the company.
Provident said it is "astonished" by the announcement.
Snowball, on Tuesday, said: "The simple fact and truth of the matter is they [the dividend payments] were unlawful. These unlawful distributions are a telling indictment of the competency of the Non-Standard Finance team and the weak oversight of their board and must call into question their ability to run a business some seven times larger than their own and one which includes a regulated bank."
Snowball added: "At this point, there is no new revelation about this deal...I strongly recommend you to get behind our board and management team and reject this dreadful and opportunistic transaction."
The CMA is currently investigating the deal and the FCA has also raised concerns about any possible relaxation of controls or reintroduction of Provident's repayment option plan, given the plan incurred a fine and redress exercise of more than GBP170 million.
Provident believes there is "no realistic prospect" of the formal CMA review being completed prior to the first closing date of May 8 or May 29, the last day which the offer will be required to be declared unconditional.
Provident said it "continues to have very material concerns about the strategic, operational and financial merits" of the offer, and re-confirms that it does not recommend the offer.
Non-Standard Finance is urging Provident shareholders accept the offer without delay.
Shares in Provident were up 1.7% Tuesday morning at 524.80 pence each. Non-Standard Finance was down 0.4% at 52.21p.
