US private equity firm HarbourVest Bidco has won a month-long battle for SVG Capital, with the UK-listed private equity investor signing over all of its investment portfolio for around £807m (€899m).
SVG Capital said this represented a 0.6% premium on the £802m value of its investment portfolio as at 31 July 2016, equal to around 715p per share.
It expects around £1.1bn to be returned to shareholders through a series of tender offers and the company’s winding up.
The takeover battle started in mid-September when HarbourVest Bidco made a hostile bid to buy SVG Capital, with a cash offer for 650p per share, after acquiring 8.5% of the firm’s ordinary share capital.
It also claimed commitments of support amounting to 51.2% of the SVG Capital shares, including its own holding.
But SVG Capital fought back, agreeing the sale of its entire investment portfolio to Goldman Sachs Asset Management’s Alternative Investments & Manager Selection (AIMS) Group, and other investors managed by the Canada Pension Plan Investment Board (CPPIB), which equated to around 680p per share.
This valued its portfolio at £748m.
Three weeks after its offer was launched, HarbourVest Bidco had acceptances representing only 27.7% of shares, besides its own 8.5% holding.
With time running out on the offer, SVG Capital then announced it had received a further proposal from HarbourVest Bidco, but that it was still finalising the terms of the asset sale to Goldman Sachs AIMS Group and CPPIB.
The upping of HarbourVest’s offer to 715p, however, appears to have been the killer blow in the battle.
Andrew Sykes, chairman of SVG Capital, said: “The company has a high-quality portfolio with real scarcity value, and, through this process, a number of highly credible and seasoned private equity investors have made offers for some or all of the investment portfolio.
“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.”
David Atterbury, managing director at HarbourVest Bidco, said: “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.”
The deal is subject to approval by SVG Capital’s shareholders, with the related general meeting likely to be held in December.