HarbourVest Partners, LLC (HarbourVest) and HarbourVest Global Private Equity Limited (HVPE) have published an offer prospectus in respect of the public tender offer by HarbourVest Acquisition GmbH (HarbourVest Acquisition) for all bearer shares of Absolute Private Equity Ltd (Absolute) currently in circulation.
Absolute is an investment company located in Zug, Switzerland and listed on SIX Swiss Exchange ("SIX"). HarbourVest Acquisition is a special purpose vehicle which is to be held by HarbourVest-managed secondary funds, together with HVPE.
As previously announced on 26 April 2011, the Offer price is USD17.25 cash per Absolute share (the Offer Price) and is subject to a minimum acceptance level of 50.01% and other customary conditions. At a 100% acceptance level, the transaction values Absolute at USD752 million. Absolute’s Board of Directors supports the Offer, and in its formal report concludes that the Offer Price is attractive and recommends that Absolute’s shareholders accept the Offer.
A cooling-off period of ten SIX trading days (the Cooling-off Period) will run from 8 June 2011 up to and including 22 June 2011. The Offer may be accepted only after the expiration of the Cooling-off Period. If the Cooling-off Period is not extended by the Swiss Takeover Board, the initial offer period of 20 SIX trading days is expected to start on 23 June 2011 and to end on 20 July 2011 (the “Initial Offer Period”). Acceptances of the Offer should be received no later than 4.00pm (CEST) on 20 July 2011. The Initial Offer Period could be extended one or several times. For further details on the timing, see the indicative timetable for the Offer below.
The Offer Price represents: a 34% premium to the average price per share over the last twelve months; a 13% premium to the average price per share over the last six months; and a 6% premium to the 60-day volume-weighted average price,
(all averages are calculated as per 21 April 2011, the last trading day prior to the publication of the pre-announcement of the Offer).
As detailed in the report of the board of directors contained in the Prospectus, the board of Absolute (the “Board”) is “convinced that the [Offer] is in the best interest of Absolute and its shareholders.” In particular, the Board cites that the attractive Offer Price was the highest bid obtained in a professionally-managed auction process. The Board’s report also notes that liquidity may be substantially limited after settlement of the Offer. Furthermore, if the Offer is not successful, the Board believes the current share price is likely to come under pressure.
“We have received considerable interest from shareholders wishing to sell their shares and this transaction offers them an opportunity to realise their investment for cash at an attractive price,” says Thomas Amstutz, Chairman of Absolute.
HarbourVest Acquisition’s ultimate intention is to secure control of Absolute with a view to initially continuing the existing investment realization strategy, which was implemented by the Board of Absolute in late 2008, when it decided not to make new commitments to private equity investments. Subject to the outcome of the Offer and regulatory issues, HarbourVest Acquisition will seek to operate Absolute as a privately-held entity. Following settlement of the Offer, HarbourVest Acquisition intends to have the Board be composed of three members, one of whom shall be Thomas Amstutz and two of whom, including the chairman of the Board, shall be designated by the group of entities ultimately managed and controlled by HarbourVest (the “HarbourVest Group”).
“HarbourVest believes this will be a mutually beneficial transaction for our funds and Absolute shareholders,” says John Toomey (pictured), Managing Director of HarbourVest. “We look forward to working with Absolute in order to affect a de-listing of the company while continuing the existing investment realization strategy.”
The transaction is expected to be completed in the third quarter of 2011. The HarbourVest Group has been advised by Debevoise & Plimpton LLP and Pestalozzi Attorneys at Law Ltd.
