By Noor Zainab Hussain
(Reuters) - Britain's Non-Standard Finance dropped the level of acceptances needed to press ahead with a 1.3 billion pound ($1.7 billion) hostile bid for Provident Financial on Wednesday after winning over investors with 53.53% of its shares.
Led by NSF's chief executive John van Kuffeler, who is a former boss of fellow subprime lender Provident, the takeover attempt has become increasingly bitter, with NSF saying Provident has been mismanaged.
In its defence, Provident has raised concerns about the strategic, operational and financial logic of NSF's offer and its historical dividend payments and share buybacks.
NSF, which first made a move in February, said in a statement that its offer was now unconditional in terms of acceptances by investors, with June 5 the last date on which the takeover may be declared "wholly unconditional".
The 511 pence per share bid has had the backing of fund investors Neil Woodford, Invesco and Marathon, who together hold more than 50% of both NSF and Provident, from the outset.
Provident, established in 1880 and based in the northern English city of Bradford, stood its ground on Wednesday, which was the closing date for shareholders to accept NSF's offer.
"This deal is not done. In three months, NSF has added just 3.5% of support, which speaks volumes. Three regulators still need to bless this and shareholders should continue to reject this woeful offer," a spokeswoman for Provident said.
NSF said investors holding 53.53% of Provident's issued share capital had accepted its offer, well short of NSF's original 90% target. NSF said it had now lowered the required acceptance level to 50% plus one Provident share.
However, Provident said that the offer remains conditional on the satisfaction or waiver of "important conditions", including approvals from regulators.
Shares in Provident closed 6.5% lower at 450 pence, while NSF closed 1.5% lower at 48 pence on Wednesday.
NSF made its offer after a 75 percent fall in Provident's share price in the last two years following a botched reorganisation of its home credit business that led to profit warnings, its chief executive's exit and a dividend suspension.
(Graphic: NSF powers ahead with hostile bid for bigger, struggling rival, https://tmsnrt.rs/2W3pRvT)
"(The) NSF Board is now approaching the Provident Board again to establish a pragmatic and constructive dialogue, so that, as and when the remaining conditions are satisfied, the interests of all stakeholders will be safeguarded," NSF said.
British asset manager Schroders, Provident's third-biggest shareholder with a 14.6 percent stake, has said it would not accept the NSF offer.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Toby Chopra and Susan Fenton)