SVG Capital has agreed to sell half of its assets to two private equity firms and wind itself down, in a complex bid to fend off a hostile takeover by US rival HarbourVest.
The FTSE-250 firm has been scrambling to find alternatives to HarbourVest's £1bn bid announced last month, which it believes undervalued itself and its assets.
SVG said today that it intends to sell half of its portfolio for £379m to Pomona Capital and Pantheon Ventures — but the deal is subject to approval by an investor vote.
It represents a 7.8 per cent discount to the value of SVG's assets, but still trumps HarvourVest's offer which marked an 11.5 per cent discount.
Before the year end SVG intends to buy back some of its own shares at 700p each, beating HarbourVest's offer for 650p per share.
"The proposed asset sale to Pomona Capital and Pantheon Ventures is supported by all members of the board, and represents the first step in a process which is designed to maximise value for shareholders through an orderly wind down of our portfolio, to generate superior value compared with the existing 650p a share cash offer from Harbourvest Bidsco," Andrew Sykes, SVG's chairman, said.
But the investor vote, the result of which will be revealed on Thursday, could prove to be a stumbling block for the deal because HarbourVest has already secured broad-based support.
It said last month that its bid had been accepted by SVG’s four biggest investors: Coller Capital, Avivda, Old Mutual and Legal & General. HarbourVest itself, meanwhile, bought 8.5 per cent of shares on the day of the offer, giving it effective control of more than 50 per cent of the group.