Hedge fund is shock winner in the £1.1bn takeover saga

THE fierce battle to buy Britain’s biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize.

SVG Capital has agreed to sell its entire investment portfolio to HarbourVest – the US hedge fund which had launched a hostile takeover bid in September.

It had originally offered to pay 650p a share, but this sparked a bidding war for SVG which saw HarbourVest kicked back on a number of occasions.

What followed was a series of announcements from SVG that it had secured 680p and then 700p per share for the business after recommending a sale to Goldman Sachs and the Canada Pension Plan Investment Board.

But in a surprise twist, SVG yesterday agreed to sell its assets to HarbourVest for 715p per share, reaching a total of £807m.

The business will then be wound down, and about £1.1bn returned to shareholders through a series of tender offers.

SVG chairman Andrew Sykes said since HarbourVest’s ‘final cash offer’ of 650p per share for the whole business on September 12 the board had ‘pursued a number of options in order to maximise shareholder value’.

He added: ‘The company has a high-quality portfolio with real scarcity value, and through this process a number of credible and seasoned private equity investors have made offers for some or all of the investment portfolio.’

He said the board was committed to delivering ‘optimum value’ for its shareholders, and that the latest offer was the ‘most compelling... of any of the proposals’.

Chief executive Lynn Fordham, 53, is set to pocket up to £8.6m from the sale. An immediate windfall will earn her £3.8m from 531,024 shares she owns outright, while company accounts suggest she could take home another 666,870 shares under various target-based bonus schemes that would earn her another £4.7m.

In total, Fordham, who was paid £3.9m last year, could earn an extra £778,630 above the original HarbourVest offer.

As part of the deal, SVG will pay wind-down costs of £36m, and break fees of about £7m.

SVG shares yesterday rose 2pc, or 14p, to 702p.