Member Info for Theborn

"So, we see the deal happening at some stage – just not on the current proposed terms. Thinking this through, we suspect that the top three shareholders will pull the irrevocables and, to the effect that they can visibly engineer certain further changes at Provident (we suspect they can’t just turn ‘full circle’ without forcing some change), we would see them potentially move to seek to drive a Provident takeover of NSF."

**He added that this news could increase the chances of private equity firms making a bid for Provident.**

https://www.yorkshirepost.co.uk/news/analysts-say-nsf-takeover-of-provident-is-unlikely-to-go-ahead-1-9712529

Analyst John Cronin at Goodbody said the fact that there were a number of separate infringements "does not look good for NSF".

"We don’t think the top three shareholders in NSF (who support NSF’s reverse takeover offer for Provident – and own 65 per cent of NSF and just under 50 per cent of Provident) will be keen to see the deal complete on the current proposed terms without the support of sufficient numbers of the residual Provident shareholder base," said Mr Cronin.

"While the acceptance threshold for the offer is 90 per cent, NSF has given itself the bandwidth to run with a Scheme of Arrangement instead, which has a lower acceptance threshold.

"Moreover, we believe that the top three shareholders in NSF would be unsupportive of the NSF Board declaring its offer unconditional as to acceptances as, to do so, could be value-destructive in the context of their substantial (and much more valuable) shareholding in Provident."

https://www.ft.com/content/9e406d62-5d40-11e9-9dde-7aedca0a081a

This deal really isn’t going to happen. Expect a 20% bounce on PFG share price next week as it’s no longer linked to NSF shares.

NSF - what a bunch of clowns. Expect it will be senior heads in their biz that will role! Including CFO and CEO.

‘Don’t go throwing stones’ comes to mind.

Checkmate. Now jog on NSF and let PFG start delivering some proper shareholder value.

April 12 (Reuters) - British sub-prime lender Non-Standard Finance(NSF) has identified errors related to its past dividends and buybacks, it said on Friday, adding that this would not affect its bid to buy larger rival Provident Financial

NSF's statement came after Provident repeatedly raised concerns about the historical dividend payments and share buybacks made by NSF.

The two lenders have been locked in a takeover tussle since NSF made a 1.3 billion pound ($1.7 billion) hostile bid.

NSF said all the infringements identified could be rectified and would have no bearing on its strategy and financial or operational performance.

It also said that there would be no impact on its ability to pay a final dividend for 2018 of 2 pence per share.

"We think these findings have, potentially, very serious implications for the probability of this deal happening," analysts at brokerage Goodbody said in a note earlier in the day.

Even if anyone was considering accepting the offer, you should never ever ever in life accept the first offer on anything, particularly from a keen buyers.

Look at the other hostle takeover where IP Group acquires Touchstone. That deal had more shareholder support than this deal and even in that situation IP Group raised their offer after the initial voting deadline.

I said previously I believe that NSF have close to nil chance of getting 75% of support they’d need to delist PFG and if they don’t get that they won’t go ahead regardless if they have 50%+. So come early May they will have another crack and up their offer, or walk away (hopefully). NSF will be well aware their original offer is now asking PFG holders to take a 10%+ loss on day 1 which can’t happen.

Also, as long as the offer isn’t accepted there is a small chance another bidder comes in.

So by accepting he NSF offer now you give up all possible upside. This all ignores the views on NSF’s management and the regulatory problems they likely coming their way. Also, their silence to the valid questions the PFG Board rasied is deafening.

I’ve still got high hopes for PFG shareprice whatever. But prefer ‘whatever’ doesn’t involve NSF.

Your maths is bad I'm afraid

You would exchange each PFG share for 8.88 NSF. With 301 shares in PFG you'd get 2,672 shares in NSF. NSF share price is about 53p, so would be valued at £1,416 - so a 10% loss on your current holding.

I think you just had the wrong NSF share price in your calc.

Unless you are Woodford the deal isn't worth voting for in current form. Unless they double the shares on off I won't be looking twice

First day I can remember since the original bid that no form 8.3 have appeared on RNS. Accompanied by an uptick in the share price. Seems odd.

Perhaps an issue with RNS today rather than something more significant/positive re PFG....

I thought at the time that this was in part a game of poker for Woodford. Construct a reverse takeover between two of your investee companies---> both share prices take an immediate bounce (c.25% at the time) giving him time to dump a little of his PFG holding (fvck knows why if you are committed to giving support to takeover that only just has 50% with your backing you would sell part of your holding in PFG taking it below 50% I don't know, but let's ignore that) ----> he must have also expected that this would bring out another bidder for PFG, again giving him a big kicker -----> gives little known minnow NSF some free publicity as many investors hadn't even heard of them.

But what has actually happened: he's inadvertently tagged the PFG share price to the minimally traded NSF shares at the 1:8.88 ratio, so ridiculously if this takeover went ahead today PFG shares would be worth £4.63!!! The lowest price ever and this is following a recent turnaround and positive results and forecasts, it's fvcking nuts! ----> NSF's tactless approach of personal mudslinging has quite rightly prompted a more professional, but damaging response from PFG (which I agree with) ----> NSF and PFG both regularly pointing out the faults with each other has crushed both share prices until this is resolved ----> easy short for MMs until this is sorted means both share prices are held artificially low.

In short, Woodford deserves what he gets with this. I have a significant holding in PFG but will sit tight and really hope Woodford gets burned. By that, I mean NSF bid falls away and NSF ultimately goes bust meaning more investors pull their cash from his funds so he then also has to sell of most of his PFG holding. Once Woodford is out at a big loss, PFG then resumes an upward price trajectory now it seems to be the only sub-prime lender who the Regulators actively praise.

PFG holders shouldn't let the short term share price make them consider accepting this awful NSF offer. The market makers are deliberately lowering the price of PFG (see earlier posts by Stalwart and myself) to try and scare holders into a bad deal. Just sit tight. If they don't get to 60% by 3 May then NSF will disappear back up the Woodford's rsehole where they came from and PFG will rebound rapidly. There is still a very real chance the closer the 3 May deadline comes that a significantly higher offer is tabled by a third party or NSF. Sit tight as you still have all the power here until NSF get up towards the 75% acceptance level which they are way way way short of and won't get.

PFG a good 30-50% undervalued at present. I'll just wait.

Next month will pass quickly. DYOR, good luck, above is just my view and not advice etc etc.

Bought 1.7m shares then immediately shorted. Wondering if that was done on behalf of one of the big institutions for additional voting rights, which might have explained the small nudge up over 50% of acceptances.

Slightly underhand way of doing things, gaining 1.7m voting rights yet taking no exposure to the company except from minimal hedging costs.

In the words of Kevin Keegan: 'I would love it, love it, if PFG Board fend off this takeover and in particular come back with a significantly improved offer from a more palatable bidder'

I remain confident in any case mainly due to undervalued PFG shares currently are. Something seismic has to happen before the 3 May deadline.

Not sure if what Deutsche is doing is legal....they are advising NSF on the takeover bid and at the same time, any time there is a uptick in the PFG share price they aggressively short it to pull the PFG price back down. I've only just realized this on reading the daily 8.5 / 8.2 reg announcements. If not illegal then desperate.

£5 PFG still criminally undervalued and not helped by artificial pressure by the shorting

A month ago they already had 49.7%, today they are trumpeting 50.7%. Its significant insofar as >50% and they could now lower their original target of 90% of shareholder agreement to 50%, but a tiny increase in real terms and signals they will be unlikely to get close to a minimum of 75% which they must be targeting.

I can't see them proceeding with a forced takeover without a minimum of 75% backing. If they don't get 75% then we may see a revised offer in an attempt to win over further shareholders or they may just give up. Given the NSF share price is now £52 they'd need to increase it to 10.5 NSF share for every PFG shares just to be at parity to their original offer. Gut feel says come early May if they have <60% then they'll walk away. >60% but <75% and potentially an increased offer. Even if they got the votes the regulatory approval is still unlikely.

I doubt any direct competitors will offer on the whole PFG business but I'm wondering if the current PFG Board are approaching funds willing to finance a management buy out and take it private. If they see the longer term value, which I feel is certainly there, you might get an offer which is palatable to current shareholders but also leaves upside once taken private - say at £8 a share. They keep repeating they are employing all options and have appointed a top team of advisors so perhaps something is happening in the background. The move today was an astute tactical step.

I'd say NSF takeover is now less than 50:50 so I'd be happy to pot this takeover back-and-forth which is just distracting and give the current board 12-18 months to prove they can deliver. If anything this episode has awoken them from their slumber which can be beneficial to share value in the future.

DYOR and above is just scenario suggestions etc.

Biggest trade in a while. £9m purchased at £5.22 per share this afternoon.

Individual views on the takeover are a little like @r5eholes in that everyone will have them. For what its worth, whilst the current management haven't covered themselves in glory, in the most part they have delivered a solid stabilization strategy at what must have been a difficult time. You could argue that now they've righted the ship then they deserve at least 12 months to sail it and see what they can deliver in a stable business environment.

The key risk in this sector is always regulation and the fact the FCA are very much onside now makes PFG a lot more attractive to buy / hold.

This share has been significantly undervalued for 6 months or so, and even more so after the recent results. They didn't knock the lights out but people forget that £3 per share is already in reserves on the balance sheet and with a realistic earnings after tax of 65p for 2019 and 80p+ 2020 onward then, without the 2017 trouble tarnishing the media view on this, a fairer value would be in the £8 per share range (10x 2020 PAT).

Unfortunately for the current PFG Board, NSF spotted this intrinsic value mismatch and made their swoop at the most opportunistic moment. They'll have realized 12 months from now the share price could be much higher and no chance of a reverse takeover at that time. Fair play to them.

Three things can happen now: 1) a 'white knight' comes in and you see another immediate 25%+ increase in the share price; 2) 6 months of wrangling and NSF take over; 3) NSF don't get much above 50% in the voting from PFG shareholders and decide not to risk pushing for the 75% they need in the next round of voting.

In the backdrop of 2) and 3) the PFG Board will be looking to show they are the best option. This will include better messaging to market than we have seen in the past and most likely a very positive Q1 update next month. NSF will be doing similar and in turn driving their own share price with Q1 announcements. So while the share price feels unfairly suppressed now, its more due to being linked to the NSF offer / share price. I can only see it going one way from this £5 level and that's north.

This is only my view on things so DYOR etc. I still feel that in 12-24 months, PFG in whatever guise / name will be far above current values. Let's see what happens.

https://www.ft.com/content/e5bd3b2a-4733-11e9-a965-23d669740bfb

'The company will come under further regulatory pressure on governance in the coming months, according to one person familiar with the PRA’s thinking.'

There is a definite limit on upside until equity raise price is sorted, but perhaps less of a limit on downside. Decided to reduce my holding and await further news. If falls sub-£8 I'll consider re-entering but starting to get concerned on the delay on announcement and the likelihood that a) the placing price will be below whatever the market price is at the time of announcement; and b) and immediate fall in price below the placing amount. I've been stung on similar before. As much as I still think long term this will come good the next 6 months might just be a time to let the dust settle. Good luck to those holding firm.

It would be the individuals involved who are culpable. Not the company. So could be a positive. Investors recover damages and the BOD are replaced.

Look at Tesco chart, it actually didn't recover than dramatically. Fell from £3 to £1.70 on the news.....five years later its trading at £2.20.

I'm holding Metro but a more dramatic recovery than Tesco is needed to recover the losses.

In saying that, there is a key differentiator between Tesco and Metro, Tesco had done about all the growing it could do at the time it encountered its accounting mishap, so I see this as part of the reason the recovery in price wasn’t more pronounced. Metro is still early stage and so far, has demonstrated significant growth potential which will continue regardless of the RWA mishap.

I must admit that my anger for the BOD is growing as each day I see more nibbled off my net worth as the share price falls without any update on the RI. If I were to lose a significant amount on this I am keeping a potential legal claim in my back pocket as I believe there may be a strong link between conversations behind the scene with II funders for the RI and the huge short positions taken on. Let’s be clear, if any IIs have been shorting the stock having been approached to support the RI by the BOD at a particular price, then they are deemed insiders to off market information. Any Directors at Metro, and any IIs shorting the stock on the back of this type of conversation would be committing an offence and would be both criminally prosecuted and sued by minority investors. I’m really hoping that isn’t the case but the more the BOD erode minority shareholder value with their silence, and the strong links the BOD have with their II backers, I do start to wonder.

Offbook buy at 870 after the bell for 50,000 shares.
Even on minimal trading the buying momentum is still strong. 1.7: 1 -> Buys: Sells

All much of a muchness until an official update to the market. My guess would be regardless of when they agree it, the announcement will be done 7am on a Friday to close the week on a high or 7am Monday to start on a high. 7am as they'll have learned their 'panicked RNS' lesson so need to stick to the norm and post at 7am. Once placing announced I imagine you'll then see deliberate press articles from Mtro announcing new awards won, positive survey results etc etc to build up positive press. I've noted their Twitter has dried up recently as I suspect they realise that leaking any positive news now would be wasted until the RI is announced in full........people with either ignore it or ask why on earth they are publishing any form of update without addressing the elephant in the room. So expect silence until RI confirmation.

You take what you can get at times like this but this is the first article I've seen stating the obvious 'this is surely overdone and still a good long term buy'

https://www.bobsguide.com/guide/news/2019/Mar/12/investors-will-forgive-metro-bank/

It's disappointing watching the price do the same thing each day on minimal volume but nothing has changed since I was happy to buy at closer to £10 now the share is approaching mid-£8s. I'll sit on it (an appropriate term at times like this) feeling confident this will rebound 50%+ from the bottom. Just depends where the bottom is and sadly that's at the mercy of the BOD giving some certainty on the placing price.

Let's hope Odey sees his @rse on his Metro short bet too:

https://www.bloomberg.com/news/articles/2019-03-08/crispin-odey-s-hedge-fund-plunges-10-as-stock-markets-rebound?srnd=premium-europe

I'm still relatively relaxed about this in the medium term.

1 - Agree the BOD messaging has been poor on the placing. But from various media reports you can be sure that Vern & Co are already well advanced in talks with their existing backers who were happy to buy in at >£30 and will undoubtedly follow their money with this follow on and see it as a great opportunity to get their average price down.

2 - Whatever the placing price is, people need to remember that it wont be reflective of the true market price given its existing backers stumping up, who, as mentioned above will be subscribing at a price they believe gets their average price down to a more realistic market value. So if placing is at £8 and they are buying same number they bought at £32 then the backers are seeing an intrinsic value per share closer to £20. Which is where I see the price in the medium term. Plus, Vern's pals are in this long term, they'll be investing as in their view this thing could be trading at £100+ a share in 5 years.

3 - The moment the placing price is announced, providing it isn't outlandishly low at, say £6, then there will be a mad rush to close out the 12% of stock on short. So the bounce the share price will naturally see from the placing announcement will be given steroids as shorts scramble to buy stock to close out. I have no reason to think the placing will be at discount to the current SP.

4 - Playing the volatility is way too risky for me at this level of price. S0d's law dictates the moment I sell out at 950p waiting for a fall back to 900p to buy back in, will be the time the placing is announced and the SP shoots up to 1200p for the reasons mentioned in point 3.

No doubt there will be plenty more swings in the weeks ahead but people holding this should stay calm. If the long term plan hasn't changed, don't go selling and buying to try and play the vol as the spread will eat away at you and no doubt you'll be the wrong side when it rebounds. Keep calm and carry on. Look forward to discussing this again at end of 2019 when price is trending back to £20.