The board of Provident Financial has back a takeover bid for the company that was supported by fund manager Neil Woodford.
Mr Woodford, via his funds, is the largest shareholder in Provident Financial, and also an investor in Non Standard Finance (NSF), the company that has submitted the takeover bid.
In a statement to the stock exchange released this morning (February 25) the board of Provident Financial described the takeover bid as "hostile" and said some of the changes to Provident's business strategy proposed by NSF would be bad for the business.
Provident Financial's share price has fallen from £7.17 to £5.63 over the past year, as profit warnings and regulatory settlements have taken their toll.
The takeover bid values the company at £1.3bn, all of it to be paid for in shares of NSF.
The board of Provident Financial said it regarded the bid as "not representing the underlying value of the business."
The statement referred to Mr Woodford.
It stated: "The board acknowledges the indications provided in relation to the offer by the company's largest shareholders with holdings in both Provident Financial and NSF.
"The board is committed, however, to maximising value for all Provident Financial shareholders and will explore all appropriate alternatives to achieve that objective.
"The board continues to strongly advise Provident Financial shareholders to take no action in respect of the offer."
Indications of support have been received from Woodford Investment Management, which is the largest shareholder, and from Mark Barnett at Invesco.
david.thorpe@ft.com
