HarbourVest's takeover of SVG Capital hit by withdrawal of support

Oliver Gill
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General Election - Economy
HabourVest's offer on 12 September took SVG Capital by surprise (Source: Getty)

Two key institutional investors have withdrawn their support of HabourVest’s hostile £1bn takeover attempt of SVG Capital (SVG).

Legal & General and Aviva – who own 4.5 and 2.8 per cent stakes in SVG respectively – had previously signed non-binding letters of intent to support the US-fund’s offer.

Hours earlier, SVG’s board redoubled its efforts this afternoon by announcing a fresh bid from group of investment funds led by Goldman Sachs and the Canada Pension Plan Investment Board and maintained its advice to shareholders to rebuff the HabourVest approach.

Read more: Goldman and Canada Pension Plan sweep in with new offer for SVG Capital

"The proposal is being evaluated urgently by the company and the board will update the market as soon as possible.

“The board continues to recommend that shareholders do not accept HarbourVest Bidco's offer. There can be no certainty that the proposal will be effected or as to its terms," SVG said in a statement.

Shareholders have until 1pm on Thursday to accept a 650p per share offer for SVG.

Read more: SVG Capital to sell half of its assets in bid to fend off hostile takeover

On Tuesday evening SVG unveiled a three-stage offer that would kick-off with the sale of a slice of assets for £379m to private equity firms Pomona Capital and Pantheon Partners. The next two stages would see SVG would up and investors repaid in two tranches.

The news that Legal & General and Aviva have withdrawn their support suggests an interest in this afternoon’s offer and means that HarbourVest no longer has the public support of more than 50 per cent of institutional shareholders.

Schroders – out of which SVG was originally spun in 1996 – retains an 11 per cent holding and along with two per cent shareholder Standard Life has previously announced it will vote against the HarbourVest offer.

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