HarbourVest has made a second offer for private equity investment trust SVG Capital (SVI), but to purchase its portfolio rather than its shares. It is offering at least £783.1m which, after wind down costs, cash balances and break fees, would be worth more than 700p a share. SVG Capital's underlying assets comprise 23 funds run by eight managers, and it also has six co-investments. These provide exposure to about 116 companies. About 29 per cent of these are in North America, with 16 per cent in continental Europe and 5 per cent in the UK, and the remaining half in the rest of the world.
This follows the private equity firm's initial takeover offer of 650p a share which SVG Capital's board opposed. Since HarbourVest's first offer on 12 September, SVG Capital has held talks with several other potential bidders, proposed and abandoned an agreement to sell half its portfolio to Pomona Capital and Pantheon Ventures, and entered into a deal to sell its portfolio to Goldman Sachs Asset Management and funds run by Canada Pension Plan Investment Board for approximately £748m.
HarbourVest says its latest proposal has similar terms to the proposed deal with Goldman and Canada Pension Plan, and would not be subject to due diligence so would take no longer than the Goldman/Canada Pension deal. But under HarbourVest's second offer SVG Capital would retain the costs and risks of a wind-down, whereas if the initial 650p a share offer was accepted HarbourVest would absorb such costs.