SVG Capital has abandoned plans to sell half of its assets to two private equity firms and wind itself down, and has instead backed a bid for its entire investment portfolio from a consortium of Goldman Sachs and Canada Pension Plan Investment Board funds.
The FTSE-250 firm has been scrambling to find alternatives to a £1bn takeover bid by US rival HarbourVest, announced last month, which it believes undervalued itself and its assets.
The private equity revealed its intention to sell half of its investment portfolio for £379m to Pomona Capital and Pantheon Ventures, in a complex bid to fend off the hostile takeover, just yesterday.
However, this was swiftly followed by the news that a new consortium had come up with an offer.
The group announced this morning that it is instead selling its entire portfolio to Goldman Sachs and Canada Pension Plan Investment Board (CPPIB) funds, for around £748m.
The group said this compares to a value of £802m as at 31 July 2016.
SVG said approximately £1.064m would be returned to shareholders, should the sale complete on the agreed terms.
The SVG board said it "believes the sale of the entire investment portfolio and wind down of the Company will generate superior value when compared with the final 650p a share cash offer from HarbourVest Bidco and will deliver greater certainty for shareholders when compared with the previously proposed sale of 50 per cent of the portfolio to Pomona Capital and Pantheon Ventures".
“Goldman Sachs AIMS Group and CPPIB, who have worked together on similar transactions in the past, have a track record of differentiating ourselves based on our experience in the market, our reputation for working with sellers to close transactions quickly and efficiently, our relationships with private equity managers, and our broad financial and structuring expertise," said Harold Hope, managing director, Goldman Sachs alternative investments and manager selection group.
"Together, we believe we can offer an attractive combination of certainty, speed of execution, and superior value to SVG Capital shareholders, and we look forward to working with SVG Capital on this transaction.”