8 May 2019 07:00
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
8 May 2019
Provident Financial plc ("Provident")
Schroders letter to the Chairman of Provident regarding NSF's unsolicited offer
A letter sent by Schroders to Provident Chairman Patrick Snowball on Tuesday 7th May regarding NSF's unsolicited offer is published below.
The Provident Board believes that the offer is significantly flawed and value destructive, and urges its shareholders to take no action in relation to NSF's offer.
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Schroders
1 London Wall Place
07 May 2019
Provident Financial Plc
Dear Chairman
Re: NSF's offer to acquire Provident Financial (PFG)
Schroders manages or administers over £420 billion on behalf of institutional and retail
investors, financial institutions and high net worth clients from around the world, invested in a
broad range of asset classes across equities, fixed income, multi-asset and alternatives. We are
long term, active investors and currently hold 14.6% of PFG stock and has no holding in Non-
Standard Finance.
We are writing to let you know that we will not be accepting NSF's offer for PFG.
Schroders does not believe that NSF's offer is in the best interest of PFG shareholders. PFG has
faced a number of issues in recent years, but the Q1 trading statement shows that it is on track
with its recovery and rehabilitation. In our view, NSF's bid risks destabilising this recovery, and
brings additional regulatory risks and uncertainty. By issuing a deadline for acceptances that
falls before the outcome of the CMA investigation is known, NSF forces PFG shareholders to
underwrite any costs of redress blindly. It also risks creating a crisis of governance if the CMA
investigation takes time to conclude.
NSF faces a number of operational and regulatory challenges, including an FCA investigation of
its guarantor lending business. We do not believe the shareholders of PFG who are also
collectively majority shareholders in NSF (namely Woodford, Invesco and Marathon) should be
seeking to impose the challenges of the latter company on the former. We are concerned that
the right of minority shareholders are not being protected, and that this represents poor
stewardship.
In our view, the best interest of PFG shareholders would be best served by the existing
management continuing to execute on their recovery plans.
Given the urgency of this situation, and in line with our policy on escalating engagements, we
will be making our views public.
Yours sincerely
Kevin Murphy
Fund Manager, Schroders
Jessica Ground
Global Head of Stewardship
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Enquiries
Provident Financial plc, Tel: +44 12 7435 1135Patrick Snowball, Chairman Malcolm Le May, Chief Executive OfficerGary Thompson / Vicki Turner, Investor Relations, Tel: +44 12 7435 1900Richard King, Media, Tel: +44 20 3620 3073
Barclays (Joint Lead Financial Adviser and Corporate Broker to Provident Financial) Richard Taylor, Tel: +44 20 7623 2323 Kunal Gandhi Francesco Ceccato Derek Shakespeare J.P. Morgan Cazenove (Joint Lead Financial Adviser and Corporate Broker to Provident Financial) Ed Byers, Tel: +44 20 7742 4000 Jeremy Capstick Claire Brooksby James Robinson
Jefferies (Financial Adviser to Provident Financial)Graham Davidson, Tel: +44 20 7029 8000Philip NobletBarry O'BrienBrunswick (PR Adviser to Provident Financial) Nick Cosgrove, Tel: +44 20 7404 5959 Charles Pretzlik Simone Selzer
Further Information
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 Financial and no one else and will not be responsible to anyone other than Provident Financial 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 Financial 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 Financial 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 Financial 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 Financial 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 Financial. 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 Financial'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 Financial 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.
Important Notices
A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on the Provident Financial 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.