HarbourVest Partners has urged SVG Capital shareholders to accept its offer to acquire all shares in the business, following a recommendation by SVG that shareholders take no action at this time.
HarbourVest Bidco, an exempted LP established for the purposes of making a bid for SVG Capital shares, made an unsolicited final cash offer on Monday of 650 pence per share. The bid valued the London-based private equity firm at £1 billion ($1.3 billion).
HarbourVest said on Friday that offers for 26.6% of shares had been accepted, “subject to an irrevocable undertaking and letter of intent.” The firm also has a letter of intent representing a further 16.1% of share capital. It has already acquired 8.5% of the ordinary shares.
However, in its financial update for the six months ended July 31 released Friday, SVG Capital said its board “believes that this offer undervalues the company and its assets.” It said the offer represents a discount of 11.5%, or 85 pence per share, to the published net asset value on July 31, “and a greater discount to the value of the investment portfolio (adjusting for cash).”
The update said the company “has received approaches from a number of credible parties, which the board believes may lead to an offer competing with HarbourVest Bidco and could deliver SVG Capital shareholders superior value than HarbourVest Bidco's final offer.” The board is in discussions with these parties, and will make updates.
“Shareholders are urged to take no action at this time,” said the financial update.
David Atterbury, HarbourVest managing director, said in a news release: “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.”
