USD 1.4 BN Deal - HarbourVest Structured SolutionsIII Full and Final Cash Offer for SVG Capital plc

TIDMSVI

RNS Number : 5200J

HarbourVest Structured SolutionsIII

12 September 2016

This announcEment contains inside information

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

 

Neither the United States Securities and Exchange Commission (the "SEC") nor any United States securities commission or regulatory authority has approved or disapproved of the Offer or passed upon the fairness or merits of the Offer or determined whether this Announcement is accurate or complete. Any representation to the contrary is a criminal offence in the United States

For immediate release

12 September 2016

FULL AND FINAL CASH OFFER

BY

HARBOURVEST STRUCTURED SOLUTIONS III L.P. ("HARBOURVEST BIDCO" or the "OFFEROR")

FOR

SVG CAPITAL PLC ("SVG Capital" or the "Company") Summary

-- HarbourVest today announces a full and final cash offer to be made by HarbourVest Bidco for the entire issued and to be issued ordinary share capital of SVG Capital, to be implemented by way of a takeover offer within the meaning of Part 28 of the Companies Act 2006 (the "Offer").

-- Under the terms of the Offer, SVG Capital Shareholders will receive 650 pence in cash for each SVG Capital Share they hold, valuing the entire existing issued share capital of SVG Capital at approximately GBP1,015 million.

-- HarbourVest believes the all-cash Offer is highly attractive for SVG Capital Shareholders, representing a compelling value proposition at a low discount to SVG Capital's last published net asset value ("NAV") (as at 30 April 2016) and a significant premium to the SVG Capital Share price as at 9 September 2016 (being the last Business Day prior to the commencement of the Offer Period).

-- The final Offer price of 650 pence for each SVG Capital Share represents:

o a premium of approximately 14.7% over the Closing Price of 566.5 pence per SVG Capital Share on 9 September 2016, being the last Business Day prior to the commencement of the Offer Period;

o a premium of approximately 23.1% to the average Closing Price of 528.1 pence per SVG Capital Share over the six month period ended 9 September 2016;

o a discount of approximately 2.4% to SVG Capital's last published NAV per SVG Capital Share of 666 pence as at 30 April 2016. This discount is significantly lower than the long-term discount at which SVG Capital's Share price has traded as compared to its published NAV, for example:

-- a 20.2% average discount to published NAV per SVG Capital Share over the one year period ended 9 September 2016; and

-- a 20.3% average discount to published NAV per SVG Capital Share over the five year period ended 9 September 2016; and

o a premium to the highest Closing Price for SVG Capital Shares since the onset of the global financial crisis in July 2008 (being 640 pence on 19 September 2008).

-- The Offer is expressed to be final, which means under the City Code that it cannot be increased.

-- HarbourVest Bidco has received an irrevocable undertaking from a SVG Capital Shareholder in respect of 31,221,994 SVG Capital Shares and letters of intent from SVG Capital Shareholders to accept the Offer in respect of a total of 35,419,782 SVG Capital Shares. These represent, in aggregate, approximately 20.0% and 22.7%, respectively, and together 42.7%, of the issued share capital of SVG Capital as at 9 September 2016 (being the last Business Day prior to the commencement of the Offer Period). The irrevocable undertaking remains binding in the event of a higher, or any other, bid or offer for SVG Capital.

-- Further details of the irrevocable undertaking and the letters of intent received by HarbourVest Bidco are set out in Appendix III to this Announcement.

-- The Offer is conditional upon, amongst other things, HarbourVest Bidco receiving valid acceptances in respect of, or otherwise acquiring or agreeing to acquire (whether pursuant to the Offer or otherwise), shares which carry, in aggregate, more than 50% of the voting rights then normally exercisable at general meetings of SVG Capital.

-- If the Offer becomes, or is declared, unconditional in all respects, HarbourVest expects that SVG Capital's investment trust status may be lost in respect of the then current and future accounting periods. HarbourVest expects that such loss of tax-exempt status as an investment trust would negatively impact SVG Capital's returns to its Shareholders by rendering its capital gains subject to corporation tax.

-- The Offer is being made by HarbourVest Bidco, an exempted limited partnership established for the purposes of the Offer. The Dover Street IX Fund is the sole limited partner of HarbourVest Bidco and the HarbourVest Bidco GP is the general partner of HarbourVest Bidco. Both HarbourVest Bidco GP and the Dover Street IX Fund are directly or indirectly managed by HarbourVest.

-- HarbourVest is an independent, global private markets investment specialist, with more than 30 years of experience and $42 billion in assets under management. HarbourVest's global platform offers clients investment opportunities through primary fund investments, secondary investments, and direct co-investments in commingled funds or separately managed accounts. HarbourVest has more than 340 employees, including more than 90 investment professionals across Asia, Europe and the Americas. This global team has committed more than $31 billion to newly-formed funds, completed nearly $14 billion in secondary purchases and invested $5 billion directly in operating companies.

-- SVG Capital plc is a publicly listed investment company incorporated in the United Kingdom and has been listed on the London Stock Exchange since 1996 with the ticker LSE: SVI. With net assets under management of over GBP1 billion, SVG Capital's stated strategy is to invest across the private equity asset class, through the cycle, providing its investors with a balanced portfolio of private equity assets. SVG Capital has been approved by HM Revenue & Customs as meeting the qualifying criteria for investment trust status and conducts its affairs so as to enable it to continue to qualify for such approval. SVG Capital is not a close company for taxation purposes.

-- SVG Capital Shareholders interested in selling their shares at the final Offer price of 650 pence per SVG Capital Share should contact Jefferies International Limited (using the contact details below), who have authority from HarbourVest to make a limited number of purchases of SVG Capital Shares other than pursuant to the Offer, such as in the open market or through privately negotiated purchases. Such purchases shall comply with the City Code, the rules of the London Stock Exchange and the provisions of the exemption provided under Rule 14e-5(b) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"). Information about such purchases will be disclosed as and if required by applicable securities laws.

Commenting on the Offer, David Atterbury, Managing Director of HarbourVest, said:

"We believe that our final cash offer provides full, compelling and immediate cash value to the shareholders of SVG Capital at a fair and significantly lower discount to both SVG Capital's last published NAV (as at 30 April 2016) and the average discount to NAV of its peers (as at 9 September 2016, based on information sourced from Morningstar).

While our offer does not currently have the recommendation of the board of SVG Capital, we look forward to a constructive dialogue with them in order to crystallise the certainty of value, today and in cash, to its shareholders. Importantly, we believe that the substantial level of irrevocable undertaking and letters of intent (being approximately 20.0% and 22.7%, respectively, and together 42.7%, of the share capital of SVG Capital in issue on 9 September 2016) received from some of the largest shareholders of SVG Capital demonstrates the attractive nature of the offer."

This summary should be read in conjunction with, and is subject to, the full text of the following Announcement and appendices to this Announcement.

Appendix I sets out the Conditions and certain further terms of the Offer. Appendix II sets out the sources of information and bases of calculation contained in this Announcement. Appendix III sets out details of the irrevocable undertaking and the letters of intent received by HarbourVest Bidco in relation to the Offer that are referred to in this Announcement. Certain terms used in this Announcement are defined in Appendix IV.

The Offer will be subject to the Conditions and further terms set out in Appendix I of this Announcement and to the full terms and conditions that will be set out in the Offer Document and, in respect of SVG Capital Shares held in certificated form, the Form of Acceptance.

It is intended that the Offer Document and Form of Acceptance containing further details of the Offer will be despatched to SVG Capital Shareholders (other than to persons in a Restricted Jurisdiction) as soon as practicable, and in any event within 28 days after the date of this Announcement (unless agreed otherwise with the Panel).

Enquiries:

 

HarbourVest Partners, LLC Tel: +44 (0) 20 7151

                                                       4211

Laura Thaxter

 

 Jefferies International               Tel: +44 (0) 20 7029
  Limited                                              8000

(Sole Financial Adviser)

Gary Gould

Tariq Hussain

Stuart Klein

 

(Equity Sales)

Tom Harris +44 (0) 20 7898 7792

 

 FTI Consulting LLP                    Tel: +44 (0) 20 3727
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