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SVG Capital rejects £1.1bn HarbourVest bid for "better offers"

“The company has received approaches from a number of credible parties"

Board room meeting
Investors counted on a sweeter offer emerging.

SVG Capital (LON:SVG) has rejected a £1.1bn hostile takeover bid from US rival HarbourVest.

But the London-listed private equity group remained defiant and said it already had a number of "promising offers" from rival bidders.

Shares rose around 4% as investors counted on a sweeter offer emerging.

HarbourVest’s offer of 650p per share represents an 11.5% discount to SVG’s latest valuation of its investments.

SVG backed up its refusal with a strong set of trading results for the six months to July, it show net asset value per share - the main indicator of performance and value for listed private equity groups - was up 12% to 735p, boosted by a weaker pound.

Chief executive Lynn Fordham said HarbourVest’s bid “undervalues the company and its assets” and remained focused on delivering “maximum value” to its shareholders.

“The company has received approaches from a number of credible parties, which the board believes may lead to an offer competing with HarbourVest and could deliver SVG Capital shareholders superior value than HarbourVest Bidco’s final offer," said Fordham.

Stifel analyst Iain Scouller was not convinced however:

“Whilst we expect many other private equity houses to have a look at the situation, we would be surprised if any bidder made a cash offer significantly above the 650p from HarbourVest."

He said it could put both parties in a difficult position.

“However, if another bidder does emerge, HarbourVest may regret having ‘boxed itself in’ with a ‘final offer’ on day one," he added.

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