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GPG shares gain after takeover bid for ClearView Wealth

Thursday 12th July 2012

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Shares in Guinness Peat Group rose 2.2 percent after a A$220 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 percent, according to a statement on the Australian stock exchange. That's an 8 percent premium to ClearView's three-month volume weighted average price, and 11 percent higher than what GPG valued its stake at in its 2011 annual report.

ClearView's stock jumped 12 percent to 52 Australian cents, valuing it at about A$205 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 pounds 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 percent 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 pound funding deficit through a mixture of extra cash and expected returns from its investment portfolio.

Crescent has built up a 12 percent 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 percent 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.

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