Private equity outfit SVG Capital (SVI) attracted a joint bid from Goldman Sachs and the Canadian Pension Plan Investment Board (CPPIB) as its takeover saga took a new twist.
Shares in SVG pared earlier losses following the announcement, at 2.15pm, and currently trade 0.8% lower at 669p.
The Goldman-CPPIB bid adds to earlier offers from HarbourVest and a joint proposal from Pomona Capital and Pantheon Ventures.
Financial details on the value of today's Goldman-CPPIB bid were not disclosed.
Shares in SVG slid 3% lower to 654p earlier in the day following a £379 million offer for half its investment portfolio by Pomona Capital and Pantheon Ventures.
SVG's board supports the Pomona/Pantheon offer and is urging shareholders to reject a 650p a share takeover bid from US private equity outfit HarbourVest, which it says undervalues the business.
It is now also reviewing the offer from Goldman/CPPIB.
SVG's plan under the Pomona/Pantheon deal, estimated to be worth 715p a share in total, is to wind down the company by the end of 2017 to maximise cash returns to shareholders.
Under the agreement, Pomona and Pantheon will pay £379 million to buy 50% of SVG's private equity portfolio at a 7.8% discount to net asset value (NAV).
SVG's board then proposes a series of further asset disposals and capital returns via tender offers.
Winterflood analyst Simon Elliott believes SVG has a difficult decision to make and notes HarbourVest’s offer valued SVG's investment portfolio at a mid-teen discount to NAV.
The analyst says HarbourVest's bid looked ‘opportunistic’ and it makes sense for shareholders to hold out for a better offer. Elliott estimates the fund’s NAV as approximately 715p on a pro-forma basis if the sale and wind-down under the Pomona/Pantheon proposal proceeds.
Elliott's 715p a share valuation estimate for the Pomona/Pantheon deal includes an allowance for the costs associated with SVG's tender offer proposal, wind-down of SVG and other expenses totalling £33m or 21p per share.
