Private Equity – ABP-PGGM move for Alpinvest frustrates GIMV

GIMV, the Belgian private equity investment group, has withdrawn the friendly euros 20.87 per share bid for Alpinvest of the Netherlands it launched in late November in the face of a rival bid from giant Dutch pension funds group ABP-PGGM. ABP-PGGM Capital Holdings tabled a bid of 23 euros per share, valuing Alpinvest at around euros 820 million ($828 million), compared with the euros 745 million value of the GIMV offer. If the offer is successful ABP-PGGM Capital Holdings intends to merge Alpinvest with Parnib, its own venture capital arm.

The ABP-PGGM bid has won the support of Alpinvest, while a number of substantial Alpinvest shareholders are also reported to view the proposed acquisition favourably. Although no detailed offer prospectus was available at press time, a statement from Alpinvest set out the grounds – over and above the obvious benefits that the 10.2 per cent premium over the GIMV price offers to shareholders – on which its management and supervisory boards are supporting the ABP-PGGM bid. The boards believe that the proposed merger with Parnib will significantly enhance the Dutch group’s European position and are also confident that APB-PGGM will provide Alpinvest-Parnib with funds to fuel strong expansion in both the private equity and venture capital sectors. Moreover, the boards take the view that the deal will offer “excellent prospects for personal development for Alpinvest’s management board and staff.

Under the terms of the pension funds’ proposal, Stan Vermeulen, Alpinvest’s current managing director, would head up the new entity.

The GIMV offer period was due to expire on 18 January, although the Belgian group, had hoped to acquire all of Alpinvest’s outstanding shares and delist the group before the end of last year. ABP-PGGM, which has recently increased its holding in Alpinvest to 26.7 per cent from the 10.5 per cent it owned before the launch of GIMV’s bid, believed the GIMV offer did not adequately reflect recent developments at Alpinvest. A small shareholders’ lobby group reportedly shared this view.

GIMV has announced that it will not launch a higher bid for Alpinvest, maintaining in a statement that a higher price is absolutely no solid choice for reasons of profitability’. The ABP-PGGM offer should deliver GIMV an attractive capital gain on the Alpinvest shares it already owns, and the Belgian group has also said that it does not expect to suffer any adverse effects as a result of the withdrawal of its bid.

The proposed GIMV/Alpinvest link-up was widely flagged as a combination likely to rival the strength of 3i Group, at least in continental Europe.

However, if Alpinvest throws in its fortunes with its new suitor, the resultant group will also be in a position to go head-to-head with 3i in the continental European mid-market. Parnib is one of the Netherlands’ leading private equity investors. The group operates throughout the whole of North West and Central Europe, while the scale of its activities in the Belgian market are such that it now operates a dedicated subsidiary, Parnib Belgium. Usually, Parnib participates as a majority shareholder although it is prepared to take stakes of up to 100 per cent in conjunction with management in buyout or buy-in situations.

Alpinvest, which manages or advises funds totalling in excess of euros 700 million ($706 million) and recently held a euros 180 million closing on its new private equity fund, has during recent years established an extensive network of strategic alliances in Europe with partners including Excel Partners in Spain, Candover and Intermediate Capital Group in the UK, Lessius in Belgium, NPE in Denmark, Private Equity Partners in Italy, TVM Technology Venture Management in Germany and, most recently, ACT Venture Capital in Ireland.

Alpinvest’s adviser is Kempen & Co and ABP-PGGM’s is Credit Suisse First Boston.