Provident Financial ‘astonished’ at admissions by suitor Non-Standard Finance that it broke company law
Provident Financial said today it is “astonished” by suitor Non-Standard Finance’s (NSF) statement after trading ended on Friday which admitted it had broken company law with previous dividend payments.
A spokesperson for Provident said: “We are astonished by NSF’s after hours announcement admitting, ten days after Provident questioned certain dividends and buy backs, an apparently wider range of unlawful distributions, and seeking to brush them away as 'technical infringements' that don't affect anything.”
Sub prime lender Provident, which is the target of a £1.3bn hostile takeover bid from NSF, had posed a series of questions about NSF’s prior dividend policy on 2 April and then raised concerns about a lack of response on Friday morning.
Read more: Provident Financial questions Non-Standard Finance's dividend payments
NSF issued a statement at 5pm on Friday which admitted to illegally paying past dividends but said the issues would not affect the firm’s financial position.
“The company has identified certain technical infringements regarding historic distributions made by the company. All of the infringements can be rectified and the NSF board considers that none of the issues impacts the company's financial position or prospects or shareholder value.”
It said the breaches would not affect its bid for Provident.
“These technical infringements, and the actions being taken to resolve them, have no bearing on NSF's financial and operational performance or its strategy, including its offer for Provident Financial,” it said.
NSF's £1.3bn offer for Provident has been rejected by the company’s board, but has the support of investors holding more than 50 per cent of its shares.
Read more: Non-Standard Finance targets Provident takeover despite rejected bid
Provident has gone through some turbulent times recently which have included profit warnings, a plunging share price and regulatory fines.
A Provident spokesperson said: “Provident Shareholders should ask themselves what this all means about the suitability of NSF to acquire and control Provident's much larger, more complex and dual-regulated business, and in particular Vanquis Bank.”