Non-Standard Finance plc announced £1.3bn all-share offer for Provident Financial plc.

The full Regulatory News Service (RNS) announcement is available to view here.

Summary

NSF announces the terms of a firm offer to acquire the entire issued share capital of Provident (the “Transaction”).

·      Under the terms of the Transaction, which will be subject to the Conditions and further terms to be set out in the Offer Document, Provident Shareholders will be entitled to receive:

For each Provident Share: 8.88 New NSF Shares

·      Based on NSF’s Closing Price of 58 pence per NSF Share on 21 February 2019 (being the last Business Day before the date of this announcement), the Transaction:

→      values each Provident Share at 511 pence;

→      values the entire issued and to be issued ordinary share capital of Provident at approximately £1.3 billion; and

→      would result in Provident Shareholders owning approximately 87.8 per cent. of the Enlarged NSF Group and becoming major participants in the potential future value creation in the Enlarged NSF Group.

·      The NSF Board believes that the Transaction would deliver significantly greater benefits for both Provident Shareholders and NSF Shareholders than either Provident or NSF would otherwise be able to deliver on their own.

·      The New NSF Shares will be issued to Provident Shareholders credited as fully paid and will rank pari passu in all respects with the NSF Shares in issue at the time the New NSF Shares are issued pursuant to the Transaction, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling after Completion. The New NSF Shares will not carry any entitlement to receive any final dividend declared by NSF in respect of the year ended 31 December 2018.

·      Conditions to the Offer include approval of the issuance of the New NSF Shares by NSF Shareholders, receipt of approvals from the FCA, the PRA and the CBI, receipt of approval from the CMA and other conditions and further terms as set out in Appendix 1.

·      Woodford, Invesco and Marathon have given irrevocable undertakings to accept the Offer and letters of intent to accept (or procure acceptance of) the Offer in respect of, in aggregate, over 50 per cent. of Provident’s issued share capital.

·      NSF intends to complete a demerger of its home credit business, Loans at Home, to assist with the CMA competition approval process and for Loans at Home to be admitted to trading either on the Main Market (with a standard listing) or on AIM. Although the timing and structure of the Demerger remain subject to further consideration, including by the CMA, it is expected that the Demerger will take place simultaneously with, or very shortly following, Completion, thereby allowing Provident Shareholders who participate in the Transaction, as well as existing NSF Shareholders, to receive shares in the newly-listed Loans at Home.

·      The NSF Board, which has been so advised by Ondra LLP and Deutsche Bank as to the financial terms of the Transaction, considers the terms of the Transaction to be fair and reasonable. In providing their advice to the NSF Board, Ondra LLP and Deutsche Bank have taken into account the NSF Board’s commercial assessment of the Transaction.

·      NSF will have the right to reduce the number of New NSF Shares that Provident Shareholders will receive under the terms of this Transaction by the amount of any dividend (or other distribution) which is declared, paid or made by Provident to Provident Shareholders, on a basis to be determined by NSF. NSF will increase the number of New NSF Shares that Provident Shareholders will receive under the terms of this Transaction by the amount of any dividend (or other distribution) which is declared, paid or made by NSF to NSF Shareholders by reference to a record date falling prior to Completion, save for any final dividend declared by NSF in respect of the year ended 31 December 2018.

For information please contact:

Shore Capital +44 (0) 20 7408 4090

Mark Percy / Daniel Bush