The fumbling consolidation of the UK’s sub-prime lending market was never likely to prove fertile material for a Mexican stand-off. Showdowns, after all, must at best maintain the fiction of dramatic tension, and at worst avoid a lunge through the saloon doors with a promise to “achieve cost savings, revenue synergies and lower funding costs as well as the potential for capital returns over time from disposals and capital efficiency”.
Yet somehow, upstart Non-Standard Finance’s (NSF) bid to acquire troubled larger peer Provident Financial (PFG) continues to drag on, four months after the deal was first tabled and swiftly rejected. Despite passing an apparent deadline last week, and ahead of an apparently final deadline on 5 June, shareholders on both sides still have little clarity on whether the attempted merger will end in a draw, victory, or a loss for everyone involved.
For readers who have not followed this saga, or simply lost patience, here’s a brief overview: on 22 February, NSF offered Provident shareholders 8.88 new NSF shares for each Provident share they owned, initially valuing the target at 511p. NSF, founded by former Provident chief John van Kuffeler, argued a combined group would be better served under the smaller company’s leadership, which was better placed to bring down the cost-income ratio of Provident’s home credit business.