Tuesday, July 17, 2018

Provident Financial targeted by the world’s largest activist investor

Elliott Advisors, the world's biggest activist hedge fund, has quietly built up a major stake in troubled doorstep lender Provident Financial.

Fresh from sparring with the likes of mining giant BHP Billiton and Dulux-owner Akzo Nobel, Elliott owns a 4.01 per cent stake in the Bradford-based sub-prime lender, according to filings made by Provident in the last few days.

Elliott is Provident's seventh-largest investor with its shareholding worth almost £60m. It first bought into Provident last August and crossed the four per cent threshold in February.

Retail fund giants Woodford and Invesco now own over 49 per cent of the sub-prime lender.

With around $35bn (£25bn) of assets under management, Paul Singer-founded Elliott is renowned both sides of Atlantic for building up stakes in companies ripe for change or in a distressed state. In January it was reportedly preparing an offer to take a controlling stake in UK bookstore Waterstones.

Read more: Woodford throws his weight behind Provident… and he had to

Who owns Provident Financial?

Invesco Ltd 24.92 per cent
Woodford Investment Management (UK) 24.34 per cent
Schroders Plc 7.55 per cent
BlackRock Inc 5.79 per cent
Standard Life Aberdeen 4.68 per cent
Marathon Asset Management LLP (UK) 4.51 per cent
Elliott Advisors Ltd (UK) 4.01 per cent

Provident endured one of the largest one-day sell-offs in FTSE 100 history last August after the firm revealed an operational overhaul had backfired and in-house agents were failing to collect home credit debts. Regulators opened the first of two mis-selling investigations and long-time boss Peter Crook stepped down.

After months of volatility, Provident's shares rocketed over 70 per cent on 27 February when it announced lower-than-expected probe fines and a rights issue around £200m less than was feared.

Short sellers have targeted Provident since its August revelation. While around 15 per cent of Provident's stock remains on loan to those betting against the lender's fortunes, levels are considerably lower than the 24 per cent registered in November last year, according to IHS Markit.

Elliott Advisors and Provident Financial declined to comment.

Read more: Hedge funds sense Provident has become "a proper short again"

Original Article

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