Goldman in £1bn race to trump HarbourVest bid for SVG

A pack of financial investors including Goldman Sachs (NYSE: GS-PB - news) was racing on Sunday night to secure backing for a £1bn deal with SVG Capital (Other OTC: SVGCF - news) , one of the London stock market's biggest private equity groups.

Sky News has learnt that two consortia, whose members are said to include a unit of Goldman and the Canada Pension Plan Investment Board, are in detailed discussions about a deal to trump a hostile approach from HarbourVest, a US-based rival to SVG (Shenzhen: 300331.SZ - news) .

An announcement is expected to be made to the London Stock Exchange (Other OTC: LDNXF - news) before the end of Monday, with one of the consortia likely to seal the backing of SVG's board in time for that statement.

The bidding groups are understood to be structuring their proposals as offers for SVG's assets - which include investments in a range of private equity funds - rather than for the company itself.

SVG would then use the proceeds of those asset sales to launch a tender offer for investors' shares in the company, according to a person close to it.

HarbourVest's bid for SVG last month - worth 650p-a-share, or just over £1bn - surprised the City, and sparked a public row between the two sides.

The proposal was presented as a final offer, meaning it has limited scope to trump any subsequent recommendation from SVG's board.

Among the biggest holdings in SVG's portfolio are stakes in companies such as Eyemart Express, an optical retailer, Tilney Bestinvest, a financial services group, and Synlab, which provides clinical laboratory services.

SVG also holds investments in private equity funds managed by firms such as Cinven and Permira.

Last week, Andrew Sykes, SVG's chairman, said shareholders should not accept HarbourVest's offer adding:

"We are in detailed discussions with a number of credible parties which may lead to an alternative transaction delivering superior shareholder value to the final offer from HarbourVest Bidco at 650p."

SVG, which is being advised by JP Morgan, Lazard (Frankfurt: A0DQP8 - news) and Numis, declined to comment on Sunday.

The company's shares closed on Friday at 678.5p, suggesting that investors believe a higher offer than HarbourVest will emerge.