Shares of troubled Bradford-based subprime lender Provident Financial rose about 15% on Friday after it received an unsolicited £1.3 billion all-share offer from smaller rival Non-Standard Finance plc (NSF).
NSF is run by former Provident Financial CEO John van Kuffeler.
NSF said the offer is supported by investors Neil Woodford, Invesco and Marathon, who together hold more than 50% of both Provident and NSF.
The offer values each Provident Financial share at 511p, but the firm’s shares closed up 15% at 589p on Friday following the news of the bid.
Jefferies analysts said Provident shareholders “are being asked to accept a nil premium offer for better management.”
If accepted, the offer would result in Provident Shareholders owning 87.8% of the enlarged NSF Group.
“The board of Provident Financial plc notes the unsolicited offer for Provident Financial announced this morning by Non-Standard Finance plc (NSF),” said Provident Financial.
“The board’s considered response to the offer will be announced in due course.
“In the meantime, shareholders are strongly advised to take no action in respect of the NSF offer.”
John van Kuffeler, founder and chief executive of NSF, said: “This transaction will create a market leader in the non-standard finance sector with a strong position in all four main segments.
“We have recognised the strong logic and value creation potential of a combination with Provident for some time and hence approached the Provident Board with a proposal in January last year.
“That approach was rebuffed and since then Provident has further lost its way.
“However, NSF has extensive management expertise and experience, and the correct strategy to turn Provident around and release significant value by combining it with our own fast-growing businesses for the benefit of customers, employees and investors.
“I’m delighted that holders of over 50 per cent. of Provident’s shares have given their support to our proposal today.”