Non-Standard Finance PLC CEO John van Kuffeler has expressed confidence that the subprime lender will succeed with its offer to acquire rival Provident Financial PLC, but declined to comment on whether the value of the bid will be increased, Reuters reported.
Non-Standard made an offer to acquire the entire issued share capital of local rival Provident Financial for approximately £1.3 billion. Provident Financial, however, rejected the bid, saying the "unsolicited and highly opportunistic" offer could have "a negative and destabilizing" effect on the company's stakeholders and that its terms do not reflect the underlying value and upside potential of the company's businesses.
"It's not so much the value or the offer, but the value of both companies put together," Kuffeler told Reuters in a phone interview.
The U.K. Competition and Markets Authority had issued an initial enforcement order to the companies, preventing Non-Standard from taking actions that could lead to their integration, transfer of ownership or control of the firms or their subsidiaries or stop the businesses from competing independently in February.
Meanwhile, the U.K. Financial Conduct Authority sent a letter to van Kuffeler on March 7 saying that if Non-Standard were to takeover Provident, any changes to Provident's business model will need to be in line with the regulator's conditions and requirements relating to the provision of high-cost credit.
Provident made changes within its home-collected credit business to reduce unaffordable lending risks and poor treatment of customers in arrears, and any changes that were to lead to a relaxation of controls would require the consideration of the FCA, according to the regulator.
The FCA added that it would act immediately on any change in controls or a shift in culture that could lead to unaffordable lending.