GPG shares rise after $A220m takeover bid for ClearView

BUSINESSDESK: Shares in Guinness Peat Group rose 2.2% after a $A220 million bid was made for ClearView Wealth, the investment firm's second-biggest asset.

Private equity firm Crescent Capital Partners intends to offer 50 Australian cents a share for ASX-listed wealth manager ClearView, of which GPG owns about 48%, a statement on the Australian stock exchange says.

That is an 8% premium to ClearView's three-month volume weighted average price and 11% higher than GPG's valuation in its 2011 annual report.

ClearView's stock jumped 12%to 52 Australian cents, valuing it at about $A205 million. The stock is rated a "buy" in a consensus of two recommendations compiled by Reuters, with a median target price of 60 Australian cents per share.

"This offer provides the opportunity for GPG to realise its investment in ClearView at a premium above its book value," managing partner Michael Alscher said.

"We are confident we can help ClearView grow its market share and become a more substantial provider of life insurance and wealth management solutions to the market."

GPG has raised about £300 million by divesting a third of its portfolio since embarking on its strategy to wind down last year, with a dozen investments sold this year. Its shares rose 1 cent to 46 cents in trading today, having shed 22% this year.

This week the firm reached a deal with the trustee of the Staveley pension scheme, for which its liable, to cover the estimated £20.3 million funding deficit through a mixture of extra cash and expected returns from its investment portfolio.

Crescent has built up a 12% stake in ClearView from various put and call options with existing shareholders and other investors, and will fund the deal with a bridging facility from Investec Bank.

It wants at least 50% of the firm to declare its takeover successful.

The private equity firm will deliver its bidder's statement to the relevant authorities today, and expects to despatch official documentation to shareholders by the end of the month.