Schroders (SDR) has backed Provident Financial (PFG) in rejecting Non-Standard Finance’s (NSF) hostile bid, arguing it risks destabilising the target’s recovery and adds regulatory risks and uncertainty. The asset manager is the largest shareholder in Provident that does not also have a holding in Non-Standard Finance, with a 14.6 per cent stake in the former.
The Competition and Markets Authority (CMA) is investigating Non-Standard Finance’s bid for its larger rival, under which Provident's shareholders would receive 8.88 new NSF shares for each Provident share. Just over 51 per cent of shareholders have so far accepted the offer.
However, in a letter to Provident chairman Patrick Snowball, Schroders fund manager Kevin Murphy said it would not be accepting the offer as issuing a deadline for acceptances that falls before the outcome of the CMA investigation is known “forces PFG shareholders to underwrite any costs of redress blindly”.