According to a report by the Financial Times, NSF, which was founded by former Provident chief executive John van Kuffler, has launched an all-share offer valuing Provident shares at 511p each. This is the second time in just over a year NSF has offered to take over its rival after putting in a bid last January which was declined, the paper said.
Woodford and his former employer Invesco are the two largest shareholders in NSF and Provident Financial, putting them on both sides of the deal. Collectively the pair own 47% of Provident and 55% of NSF.
Marathon Asset Management, which owns a 10% stake in NSF, is also among Provident’s largest shareholders.
Provident’s shares spiked as news of the deal broke on Friday morning and were up over 11% at 569p at the time of writing. But its shares are still down some 80% from their peak price of £26.36p in 2015.
The sub-prime lender has been a thorn in Woodford’s side since 2017 after a series of profit warnings, FCA probes and management scandals knocked 70% off its share price. It has remained one of the biggest underperformers in his £5.6bn UK Equity Income fund, which has severely lagged peers in the UK All Companies sector since launch, returning -4.6% against the sector’s 28.9% over three years, according to FE Analytics.
If the NSF bid is accepted, Provident shareholders will own 88% of the combined group, with 8.88 new NSF shares for each Provident share.
Provident issued a statement on Friday morning saying that it “notes the unsolicited offer” but urged shareholders to take no action in response. It said the board would give its response to the offer in due course.
Woodford Investment Management declined to comment.