SVG Capital says The Board believes that Harbourvest’s 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 GBP347.4 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 SVG expects further gross proceeds of approximately GBP105.0 million from the mature Permira and structured products portfolios over the coming months.
The fund’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 GBP13.1 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 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.”
SVI : SVG in talks with a number of credible parties