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Private equity group SVG jumps 15% after £1bn US bid

Discussion in 'Market News' started by Lily, Sep 12, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Company tells shareholders to take no action but US group has 51% support

    On a down day, private equity group SVG Capital is bucking the trend following a £1bn offer from US rival HarbourVest Partners.

    The US group is offering 650p a share in cash, and has bought 8.5% of the business, meaning it has the backing of around 51.2% of the shareholder base.

    While our offer does not currently have the recommendation of the board of SVG Capital, we look forward to a constructive dialogue with them in order to crystallise the certainty of value, today and in cash, to its shareholders.

    Overall it looks like this deal is fairly far down the line ... Whilst the initial offer appear at a discount of 2.4% to the April net asset vale, this doesn’t take into account the foreign exchange moves since Brexit and the performance of the portfolio since April. As a result of foreign exchange alone we estimate the discount to be closer to 10%. However, despite this slightly wider discount this still appears an attractive offer with the majority of other private equity names trading wider than 10%, with a number of discounts greater than 20% offering investors in SVG an opportunity to recycle capital.

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