SVG: In ‘detailed’ talks with unnamed parties

In its defence document published Thursday, the London-listed private equity investor repeated its recommendation that shareholders reject HarbourVest’s 650p-a-share offer.

London-listed SVG, the target of a £1.015 billion ($1.3 billion; €1.2 billion) unsolicited bid from much bigger US rival HarbourVest, once again urged shareholders to refuse HarbourVest's offer of 650 pence a share, saying it is in “detailed discussions” with other parties, and will update shareholders on the outcome by 3 October.

SVG was due to release its defence document today, 29 September, as under the City Code on Takeovers and Mergers, the target of a bid has fourteen days from the time an offer document is published to issue its response.

In its announcement on Thursday, SVG reiterated its belief that HarbourVest's offer undervalues the company and its assets.

The private equity investor's portfolio, which consists of a mix of private equity fund investments, co-investments and direct investments, and structured products, remains “highly cash generative”, and in the coming months there will be further gross proceeds that are worth about £105 million, from mature investments in Permira and its structured products portfolios, SVG said.

Furthermore, the company's investment portfolio and cash balances are mostly denominated in US dollars and euros, and since its previous reporting period on 31 July, both the portfolio and cash balances have benefited from the fall in sterling, SVG said.

SVG did not identify the parties it is in detailed discussions with, but noted that its portfolio is appealing to “financial buyers, including secondary funds”.

“We are in detailed discussions with a number of credible parties which may lead to an alternative transaction delivering superior shareholder value to the final offer from HarbourVest”, SVG chairman Andrew Sykes said in the statement, adding that SVG will “update shareholders on the status of these discussions” on or before 3 October.

SVG shares were 0.75 percent higher at 674 pence early on Thursday, more than 3 percent above the offer price, though that’s down from a post-bid high of 680 pence.