Schroders backs SVG as HarbourVest deadline looms

SVG Capital’s second-largest shareholder says it is supporting the company’s management as the London-listed private equity investor fends off a £1.015 billion ($1.3 billion; €1.2 billion) unsolicited bid from its much larger US rival, HarbourVest Partners.

UK asset manager Schroders, which manages some £343.8 billion in funds, now holds around 17.7 million shares, or 11.3 percent of SVG’s total share capital, according to a regulatory filing dated 16 September. SVG’s biggest shareholder is London-based secondaries firm Coller Capital, which is backing HarbourVest; Coller formally tendered its 26.6 percent to HarbourVest last Friday.

“Schroders continues to be supportive of the SVG management,” the company said in a statement.

Schroders offloaded about 1.05 million shares in SVG on 15 September, three days after HarbourVest launched its bid, selling at the offer price of 650 pence a share, a regulatory filing shows.

In its statement, Schroders said, “We are required to deal as necessary to meet cash flow obligations for our funds, but this has no bearing on our ongoing support for the business.”

SVG said in its interim results last Friday that it has received approaches from “a number of credible parties”, paving the way for a competing offer that could top HarbourVest’s bid.

HarbourVest responded by calling on SVG shareholders to accept its offer “without delay”. The Boston-based investment firm has set a first-close deadline of 6 October for shareholders to tender their shares.

However, since HarbourVest issued its offer document on 15 September, the deadline could be extended by up to 60 days from the date the offer was issued, to 14 November, if the level of acceptances is below 50 percent at the first-close deadline, research analyst Simon Elliott at Winterflood Investment Trusts said in a note.

“Under the Takeover Code, 7 November is the latest date by which any rival bidder would be able to make an offer, assuming the process is still ongoing,” he wrote.

HarbourVest’s offer is full and final, meaning that under the City Code on Takeovers and Mergers, it cannot be increased.

Adding together Coller’s 26.6 percent and the 8.5 percent of SVG stock that HarbourVest bought last Monday, the firm now has valid acceptances from 35.1 percent of shareholders. It also has letters of intent to accept the offer from shareholders like Aviva, Legal & General Investment Management, and Old Mutual, which added together would come to a level of support representing 51.2 percent of SVG’s stock.

HarbourVest is ranked 6th in Secondaries Investor‘s Si 30, a ranking of the top 30 secondaries fundraisers since 2011, with $10.9 billion raised.

SVG reported a net asset value of 735 pence a share as at 31 July in its interim results, valuing the company at £1.15 billion. After adjusting for a post-reporting period change, the latest NAV stands at 727 pence a share. SVG’s share price was a touch lower at 668.50 pence in late afternoon trading.

A spokesman for HarbourVest declined to comment on Schroders’ statement expressing support for SVG management.