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HarbourVest, Goldman/CPPIB consortium make offers for SVG Capital

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HarbourVest, Goldman/CPPIB consortium make offers for SVG Capital

A pair of suitors have made offers for , a day after theLondon-based firm announced a plan to sell half its investment portfolio andthen wind down the company.

HarbourVest Structured Solutions III LP on Oct. 5 made afull and final cashoffer to acquire SVG Capital for 650 pence per share, criticizing the firm's"nonbinding and highly conditional" proposal a day earlier to sell a chunk of its investmentportfolio to a consortium and then wind down the company. SVG Capital also saidOct. 5 that it received an offer for its entire investment portfolio fromGoldman Sachs Asset Management's Alternative Investments and Manager SelectionGroup and certain investment entities managed by the Canada Pension PlanInvestment Board.

SVG Capital's proposed transaction would entail the sale of50% of its investment portfolio to Pomona Capital and Pantheon Ventures for£379 million, representing a 7.8% aggregate discount to the assets' July 31value. The company would also launch a tender offer of up to £450 million at700 pence per share by the end of the year, with a further tender offer of at least£300 million to follow in early 2017.

SVG Capital would then pursue an orderly runoff of itsremaining assets through a combination of further returns and asset sales, witha view to returning the majority of its cash holdings in the first half of 2017and effecting an orderly wind-down by the end of 2017. Its remaining investmentportfolio would be valued at £388 million after the proposed sale, and its proforma cash balance adjusted for the first tender offer is expected to be about£265 million.

"The board notes that the proposed asset sale and theorderly wind-down are subject to execution and market risks but believes theseare acceptable given the potential value available to shareholders," thecompany said.

HarbourVest Structured Solutions III said, meanwhile, thatits offer would amount to a "clear and certain transaction" underwhich SVG Capital shareholders would receive 650 pence in cash for each sharethey hold, to be paid within 14 days of the offer becoming or being declared unconditionalin all respect. SVG Capital said in announcing its plan that the HarbourVestoffer undervalues the company, and it said in announcing the Goldman-CPPIBoffer that it continues to recommend that shareholders do not accept theHarbourVest offer.

HarbourVest Structured Solutions III, indirectly owned byBoston-based HarbourVest PartnersLLC, said it has applied to the U.K. Financial Conduct Authorityfor approval of its proposed transaction, and said it expects to be able tocomplete the offer, with FCA consent, well before the expected closing date ofthe first tender offer. It noted in a follow-up filing that theFCA has until Dec. 6 to consider the proposed change of control, subject to anextension of up to 30 working days.

Goldman Sachs Asset Management is a unit of