SVG fends off HarbourVest bid with NAV uplift

The London-listed private equity investor urged shareholders to take no action on HarbourVest Partners' £1bn bid, saying the 650p-a-share final offer ‘undervalues the company’.

SVG Capital said in its earlier than scheduled interim results on Friday that it has received approaches “from a number of credible parties”, opening the way for a competing offer that could top HarbourVest Partners‘ £1.015 billion ($1.3 billion; €1.2 billion) unsolicited bid.

On Monday, Boston-based private equity investment firm HarbourVest surprised the market with a full and final cash offer of 650 pence a share for SVG, saying it would use financing from its $4.1 billion Dover Street IX secondaries fund. Under City rules, this offer cannot be increased.

At the time, SVG noted the offer and urged shareholders to take no action, saying it would be updating the market on its latest net asset value on 20 September. But SVG has moved its reporting date to Friday (16 September), and in its interim results, the company once again urged shareholders to hold out.

“The Board believes that the unsolicited final offer from HarbourVest BidCo undervalues the Company and its assets,” SVG’s chief executive Lynn Fordham said in a statement.

“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.”

In its six-month results released on Friday, SVG reported a 12 percent increase in net asset value per share to 735 pence as at 31 July, which values the company at £1.15 billion. The increase was driven by a “significant uplift” from foreign exchange movements over the past six months, SVG said.

The HarbourVest bid, at 650 pence, now represents a discount of around 12 percent to NAV, rather than the 2.4 percent discount on the previous valuation.