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Goldman Sachs and CPPIB Throw Their Hats into the Ring for SVG Assets

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Pension Giant Canadian Pension Plan Investment Board and Goldman Sachs Have Displayed Interest in Private Equity Investor SVG Capital’s Listed Assets, Making Them HarbourVest Partners Rivals

On the 3rd of October, SVG Capital issued a statement that it was conducting talks with the consortium formed by CPPIB and Goldman Sachs. The talks are in reference to the investor selling their portfolio and not the direct sale of the company, which would have made the consortium a direct competitor of HarbourVest. It should be noted that SVG included a caveat that the consortium didn’t say they weren’t interested in making an offer to rival HarbourVest, indicating there’s a possibility they might also be interested in buying the equity investment company and not just their portfolio.

The announcement comes on the heels of a weekend spent in serious discussions with rival interested parties and consultants in an attempt to stop HarbourVest’s hostile takeover of SVG with their £1 billion bid.

The problem with the whole scenario is that SVG feels the hostile offer made by HarbourVest of 650p per share, which was made on the 12th of September, is much too low and seriously undervalues their shares. On the 29th of September, the company told shareholders that they should not accept the offer HarbourVest made, explaining that they were in the middle of discussions with quite a few credible interested parties that could result in a different sale that would generate more value for shareholders.

The company’s shareholders must give their answer to HarbourVest’s proposal by the 6th of October. SVG’s biggest shareholder, Coller Capital, is completely supportive of HarbourVest’s offer, whereas the company’s second biggest shareholder, namely Schroders, is standing firmly behind SVG’s management.

SVG also stated that they have received other offers as well, besides the one Goldman Sachs and CPPIB put in. There appears to be another consortium of interest parties who want to purchase some of the company’s assets and that there is yet another party who has shown interest in purchasing the entire company. Again, the company stated they were involved in detailed talks with another consortium and that one of the members of that consortium has a different partner, with whom another offer was put in.

On the 24th of September, the Telegraph stated that some of the bidders include AlpInvest Partners, a private equity investor based in Amsterdam, Lexington Partners based in New York and KKR, a buyout company. None of the aforementioned parties were available for comment.

If SVG’s shareholders accept the bid HarbourVest put on the 6th of October, then it’s likely the start of SVG’s final phase after operating for two decades as a private equity investment firm. HarbourVest explained they are considering taking the company into the run-off. SVG has in its portfolio buyout funds such as Permira and Cinven, among others.


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About

Jason Seligman covers multi-industry micro cap companies at Micro Cap Mag. Jason has covered the US industrial space for over 6 years and has been an equity research analyst for 11 years, based in London, Hong Kong and (currently) Washington DC.


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