SVG Capital agreed in principle to sell 50% of its investment portfolio to private equity firms Pomona Capital and Pantheon Ventures and to wind down the company.
The board of the London-based private equity firm has proposed to wind down the company, maximizing cash returns to shareholders, and has agreed in principle to a deal to sell 50% of the investment portfolio to the two firms for £379 million ($492 million). This represents an aggregate discount of 7.8% vs. a July 31 value of the assets, said a news release Tuesday by SVG Capital.
SVG Capital said it is also planning a £450 million tender offer before the end of the year, at 700 pence per share, and expects to launch a further £300 million tender offer at prevailing net asset value early next year. “Further tender offers will be made as investments are sold,” the news release said.
The “board believes the wind-down of the company will maximize returns for shareholders, when compared with existing 650 (pence) a share cash offer from HarbourVest Bidco,” the release said. HarbourVest Partners had made an unsolicited bid for the firm last month, valuing SVG Capital at £1 billion. SVG Capital had encouraged shareholders not to take action on the offer.
“After careful consideration and given the timing constraints, the board believes that shareholder value would be maximized through an orderly wind-down of the company, including the sale of a significant percentage of its investment portfolio and an orderly sale of its remaining assets,” the release said.
SVG Capital had also been in discussions with a number of other parties.
“The company has a diverse shareholder base with differing views, investment mandates and time horizons,” said Andrew Sykes, chairman of SVG Capital, in the release. “The board has pursued a number of options in order to create the most attractive solution for all shareholders.” Mr. Sykes said the proposed asset sale to Pomona and Pantheon is supported by all members of the board.
"We welcome the announcement made by the board of directors of SVG Capital PLC and reiterate our enthusiasm for the potential of the transaction," Pomona and Pantheon said in a joint statement Wednesday. "We know this high-quality portfolio of assets and its GPs well, and together we are investors in the significant majority of the assets. Our two teams are working in close collaboration and we have great confidence in our ability to transact in a timely and efficient manner. We look forward to working with the SVG Board in the coming days and weeks."
Details on the timing of any deal could not be learned by press time. A spokesman for SVG Capital could not be reached by press time.