Source - RNS
RNS Number : 1976L
SVG Capital PLC
29 September 2016
 

SVG Capital plc

Kean House

6 Kean Street

London WC2B 4AS

Tel +44 (0)20 3457 0000

Fax +44 (0)20 3457 0009

www.svgcapital.com

 

Press Release

For immediate release 29 September 2016

Publication of Response Circular

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

SVG Capital plc ("SVG Capital" or the "Company") is today posting its response circular ("Response Circular") to the unsolicited final offer by HarbourVest Structured Solutions III L.P. ("HarbourVest Bidco") announced on 12 September 2016 (the "Offer").

 

Highlights:

·     The Board believes that the Offer undervalues the Company and recommends that Shareholders do not accept HarbourVest Bidco's Offer of 650p per share.

 

·     Since the announcement of the change of the Company's investment strategy in December 2011,
SVG Capital has reported NAV and share price growth of 18.5% p.a. and 24.0% p.a. respectively (as at 31 July 2016).

 

·     The Offer represents a discount of 16.5% to the value of the investment portfolio at 31 July 2016 (adjusted for £347.4 million of cash) and a discount of 11.5% to the NAV of 735p* at that date.

 

·     In the short term, the portfolio continues to be highly cash generative and the Company expects further gross proceeds of approximately £105.0 million from the mature Permira and structured products portfolios over the coming months.

 

·     The Company's investment portfolio and cash balances are predominantly held in US$ and Euros. Since 31 July 2016, sterling has depreciated by 1.6% against US$ and 1.9% against Euro. This depreciation has had a positive impact on the sterling valuation of both the investment portfolio and cash balances. As previously announced, the value of the investment portfolio has also been impacted by the £13.1 million (at 31 July 2016 foreign exchange rates) decline in value of the investment in Platform Specialty Products.

 

·     The Board recognises the scarcity value of the Company's investment portfolio and the appeal of the portfolio to financial buyers, including secondary funds.

 

·     The Board is in detailed discussions with a number of credible parties which may lead to an alternative transaction delivering superior shareholder value to the HarbourVest Bidco Offer.

 

·      The Board is focused on delivering shareholder value and will announce an update on the status of these discussions on or before 3 October 2016.

 

Commenting on the Offer, Andrew Sykes, Chairman of SVG Capital, said: "The Board recommends that Shareholders do not accept the Offer. 

"The Company has a portfolio of highly attractive assets that continue to perform well and the Board recognises the scarcity value of these and the appeal of our investment portfolio to financial buyers. The current Offer represents a discount of 16.5% to the value of the investment portfolio at 31 July 2016 and undervalues the Company.

"We are in detailed discussions with a number of credible parties which may lead to an alternative transaction delivering superior shareholder value to the final Offer from HarbourVest Bidco at 650p. We will update Shareholders on the status of these discussions on or before 3 October 2016."

The Response Circular is published in accordance with Rule 25.1(a) of the City Code on Takeovers and Mergers and a copy will be posted or otherwise made available to SVG Capital shareholders today.

 

*In accordance with Rule 29 of the Takeover Code, a report regarding the consistency of the basis of preparation of the Company's Net Asset Value as at 31 July 2016 is included in Part VI of the Response Circular, the basis of preparation itself is included in Part V of the Response Circular.

 

For further information please contact:

 

SVG Capital

Alice Kain or Mervyn Douglas             

020 3457 0000

 

J.P. Morgan Cazenove

Conor Hillery, Mike Collar, Dwayne Lysaght or Adam Laursen

020 7777 2000

 

Lazard

Melanie Gee, Nicholas Millar or Denis Martin

020 7187 2000

 

Numis

David Benda

020 7260 1000

 

Maitland

Neil Bennett or Tom Eckersley

020 7379 5151

 

Important Information

This announcement has been released by the Company on behalf of the Board. It is for information purposes only, and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction.

 

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for SVG Capital and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than SVG Capital for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation to any matter referred to herein.

 

Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to SVG Capital and no one else in connection with the matters referred to in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than SVG Capital for providing the protections afforded to clients of Lazard & Co., Limited, nor for providing advice in relation to any matter referred to herein. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with any statement contained herein or otherwise.

 

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting as joint financial adviser and broker exclusively for SVG Capital and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than SVG Capital for providing the protections afforded to clients of Numis Securities Limited, nor for providing advice in relation to any matter referred to herein.

 

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of the offeree or of any securities exchange bidder (being any bidder other than a bidder in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange bidder is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree and (ii) any securities exchange bidder(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange bidder is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange bidder prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange bidder must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange bidder. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange bidder, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of the offeree company or a securities exchange bidder, they will be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by any bidder and Dealing Disclosures must also be made by the offeree company, by any bidder and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and bidder companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any bidder was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

Publication on a website

A copy of this announcement and any documents required to be published pursuant to Rule 26.1 of the City Code will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on SVG Capital's website at http://www.svgcapital.com/ by no later than 12 noon (London time) on the Business Day following the date of this announcement until the end of the offer period. For the avoidance of doubt, the contents of that website are not incorporated into, and do not form part of, this announcement.

 

Any Shareholder, person with information rights or other person to whom this announcement is sent may request a copy of each of the documents required to be published pursuant to Rule 26.1 of the City Code, or a copy of this announcement, in hard copy form. Hard copies will be sent only where valid requests are received from such persons. Requests for hard copies are to be submitted to the Company Secretary, SVG Capital plc, Kean House, 6 Kean Street, London WC2B 4AS or contacting the Company Secretary during business hours on 020 3457 0000 or if calling from outside the UK on +44 20 3457 000. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. A hard copy of this announcement and any other document referred to in this announcement will not be sent to you unless so requested. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

 

Sources Appendix

 

The relevant bases of calculation and sources of information are provided below in the order in which such information appears in this announcement. Where such information is repeated in this announcement, the underlying sources and bases are not repeated.

 

Page 1

(A)

The statement that since the change of investment strategy in December 2011, SVG Capital has reported NAV and share price growth of 18.5 per cent. p.a. and 24.0 per cent. p.a. respectively (as at 31 July 2016 and, with respect to the share price, from 30 December 2011) is sourced from Morningstar.

(B)

The references to the Offer representing a discount of 16.5 per cent to the value of the Company's investment portfolio at 31 July 2016 (adjusted for cash) are based on (i) the value of Company's net assets (£1,149.3 million), investment portfolio (£801.9 million), and other net assets (principally cash) (£347.4 million), in each case as stated in or derived from the Company's balance sheet for the six months ended 31 July 2016; and (ii) the implied equity value of the Offer of £1,016.9 million (calculated by multiplying the Offer Price by the fully diluted share capital as set out in the Response Circular) (the ''offer value''). The discount has been calculated by comparing: (a) the offer value less the value of the other net assets (£669.5 million); to (b) the value of the investment portfolio (£801.9 million). The references to the Offer representing a discount of 11.5 per cent. to the NAV at 31 July 2016 are based on: (i) the value of Company's net assets (£1,149.3 million); and (ii) the implied equity value of the Offer of £1,016.9 million (calculated by multiplying the Offer Price by the fully diluted share capital of the Company).

(C)

The reference to the further gross proceeds of approximately £105.0 million which the Company expects from the mature Permira and structured products portfolios over the coming months is sourced from public announcements by Platform Specialty Products and the Company's interim results announcement and presentation released on 16 September 2016, which contains details of expected distributions from the portfolio and the updated valuation of the Company's interest in Platform Specialty Products.

(D)

The reference to the Company's investment portfolio and cash balances being predominantly held in US dollars and Euros is sourced from note 13 on page 45 of the Company's interim financial statements for the six months ended 31 July 2016.

(E)

The reference to sterling having depreciated by 1.6 per cent. against US dollars and 1.9 per cent. against Euro since 31 July 2016 is derived from Bloomberg as at 27 September 2016.

(F)

The reference to the £13.1 million decline in value of the investment in Platform Specialty Products has been calculated at 31 July 2016 foreign exchange rates.

 

Registered Office

Kean House

6 Kean Street

London WC2B 4AS

 

Registered in England: No.3066856

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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