The board of SVG Capital (SVG) has accepted an increased takeover offer from US behemoth HarbourVest that will likely draw to a close a tumultuous month of punches and counter-punches between the two parties.
The confirmation of the deal was announced this afternoon and will mean SVG shareholders will receive the equivalent of 715p a share for the assets of the company, a significant premium to HarbourVest's first offer of 650p a share.
David Atterbury, managing director of HarbourVest said:
We are pleased to have signed an agreement with the board of SVG Capital on our proposal to acquire 100 per cent of the company’s investment portfolio.
The transaction seeks to optimise the combination of value and certainty of returns to shareholders and we look forward to working closely with SVG Capital going forward to obtain shareholder approval and effect the transfer of assets.
After initially rebuffing HarvourVest's approaches, SVG received two further approaches from private equity fund consortiums, both of which the board recommended.
Nevertheless, HarbourVest appeared to be in pole position after rounding up over 50 per cent of shareholder support for its 650p offer. But the night before a critical shareholder vote on the deal, two key investors, Aviva and Legal & General, withdrew their support.
HarbourVest subsequently upped its deal. SVG has now agreed to it and is asking shareholders to support the deal ahead of any previous offer recommendations. Sources close to the deal said: "[Chief exec] Lynn Fordham has played a blinder."
SVG's chairman Andrew Sykes said that the premium that HarbourVest was now prepared to pay over its original offer – it is equivalent to 715p compared to the 650p originally offered on 12 September – proved that the board had delivered on providing "optimum value for all its shareholders". Sykes added:
After careful consideration, we are recommending HarbourVest Bidco's asset purchase transaction to acquire the company's investment portfolio, since we believe it provides the most compelling combination of value and certainty of deliverability of any of the proposals submitted to the company.
We will now seek to secure shareholder approval with minimal delay so that we can begin the process of returning cash to shareholders as soon as possible.
Now agreed by the board, the latest offer from HarbourVest will be put to shareholders once its 650p offer lapses today. It will require at least 50 per cent approval.
The two underbidding consortiums (Goldman Sachs/CPPIB and Pantheon/Ponama) are in line to receive over £6m in break fees if the latest HarbourVest deal goes ahead.
|Links to the offers SVG has received:|