* Rejects bid from HarbourVest at 650 pence a share
* Says offer undervalues firm, assets
* Says talking to other parties; shares up 4 pct
By Simon Jessop
LONDON, Sept 16 (Reuters) - Britain's SVG Capital rejected a hostile bid by U.S. rival HarbourVest on Friday,saying the $1.35 billion offer undervalued the listed privateequity firm, and it was in talks with other potential suitors.
Investors have been frustrated for years by Britain's listedprivate equity sector, which has traded at a discount to thevalue of its assets, prompting a coup by activist investorEdward Bramson at Electra Private Equity.
The prospect of a rival bid for SVG saw its shares jump pastHarbourVest's 650 pence a share final offer, which already hasthe support of a large chunk of SVG's investors, and by 0738GMT, SVG stock was trading up 4 percent at 676 pence a share.
SVG said the HarbourVest bid - at a discount of 11.5 percentto the fund's July net asset value, and a greater discount tothe value of the investment portfolio - undervalued both thecompany and its assets.
"The latest strong performance builds on the double-digitannual growth of the past six years. In particular, theinvestments made under the new strategy have performed well," itsaid in a statement with results for the six months to end-July.
The response comes days after Boston-based HarbourVest,which manages $42 billion, made public its bid. At the time, SVGasked investors to do nothing until it had filed its results.
Posting a 12 percent increase in the net asset value pershare to 735 pence on Friday, helped by a "significant" currencyboost, and a total return from its investment portfolio of 13percent, SVG again advised investors to sit tight.
"The Company has received approaches from a number ofcredible parties, which... may lead to an offer competing withHarbourVest and could deliver SVG Capital shareholders superiorvalue," SVG Chief Executive Lynn Fordham said. (Editing by Alexander Smith)
