Cyrun takes over SVM investment trust
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Cyrun Finance is now likely to have taken “effective control” of the SVM UK active investment trust after the trust announced Cyrun had bought another large stake this morning.
Cyrun, an American investment vehicle attempting a rare hostile takeover of the trust, now owns over 42 per cent of its shares.
Together with the acceptances of its offer that are likely to be received, it now has “effective control” of the portfolio.
The board of the SVM UK Active fund has advised its shareholders to accept the offer from Cyrun. “With Cyrun likely to obtain control, there is now considerable uncertainty over the future direction and management of the company for any shareholders remaining invested in the company,” a statement to the stockmarket says.
The board of the trust says it is aware that some other of the company’s larger shareholders are likely to accept or have accepted the Cyrun offer. Cyrun is therefore likely to achieve its acceptance condition of 50 per cent.
One of the company’s larger shareholders today announced it had sold its entire holding in the shares, which are understood to have been purchased by Cyrun.
The vehicle has offered to pay shareholders 94.25 per cent of the trust’s formula asset value, worth a minimum price of 191.2p per share, up from 176p stated in a previous offer.
Over the past few weeks, the board has attempted to find means of returning greater value to shareholders than the 5.75 per cent discount to FAV at which the trust trades. It has also aimed to beat the minimum price under the Cyrun offer and has offered a rollover into the SVM UK Growth Fund.
Cyrun, however, had made clear that it would use its votes to block any such reconstruction or any liquidation proposal.
Just days ago, the board wrote to its shareholders and “strongly advised [them] to take no action and, in particular, not to sell their shares in the company to Cyrun or accept the Cyrun offer”.
The general meeting scheduled for May 20 has now been postponed indefinitely.
At the end of last week, the trust’s shares were valued at £63.4m and traded at a discount of 4.8 per cent to the value of its portfolio.
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