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SVG Capital rejects 'undervaluing' £1bn proposed takeover deal by HarbourVest

Published 16/09/2016

SVG Capital fought off a takeover approach from HarbourVest with a view to obtaining a better deal
SVG Capital fought off a takeover approach from HarbourVest with a view to obtaining a better deal

Private equity group SVG Capital has batted away a takeover approach from HarbourVest as it holds out for a sweeter bid from a rival suitor.

Lynn Fordham, SVG chief executive, has resisted the tie-up on the grounds that the £1 billion proposed deal "undervalues the company and its assets".

But in a fresh twist, Ms Fordham said the company had received approaches from rival bidders which had the potential to trump HarbourVest's 650 pence-per-share offer.

"The company has received approaches from a number of credible parties, which the board believes may lead to an offer competing with HarbourVest and could deliver SVG Capital shareholders superior value than HarbourVest Bidco's final offer," she said.

The comments came as SVG revealed that net asset value per share - its key performance indicator - lifted 12% to 735p in the six months to July 31.

The performance builds on the double-digit annual growth notched up by the firm over the past six years, the company said.

Responding to SVG's statement, David Atterbury, managing director of HarbourVest, stood by the firm's full and final cash offer.

He said the bid provides a " full, compelling and immediate cash value to the shareholders".

"Given the absence of a higher cash offer today, or any certainty that one will be forthcoming taking into account the support we have received to date, we urge that shareholders accept our offer without delay," he added.

HarbourVest - a global private equity investment firm with more than 42 billion US dollars (£32 billion) in assets under management - made its revised pitch of 650 pence per share on Monday.

The offer was 14.7% higher than SVG's closing stock price on Friday and 23.1% higher than the average closing share price over the past six months.

However, it was lower than an earlier proposed takeover price of 666 pence per share, which was put on the table before the Brexit vote.

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