* Rejects HarbourVest bid at 650 pence per share
* Says offer undervalues company, assets
* Shares up 4.4 pct (Adds HarbourVest reaction)
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 that it is in talks with other potentialsuitors.
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 sent its stock aboveHarbourVest's 650 pence per share final offer, which already hasthe support of a large chunk of SVG's investors. By 1517 GMT theshares were up 4.4 percent at 679 pence.
SVG said the HarbourVest bid -- at a discount of 11.5percent to the fund's July net asset value and a greaterdiscount to the value of the investment portfolio -- undervaluedboth the company 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 July 31.
The response comes days after Boston-based HarbourVest,which manages $42 billion, made its bid public. At the time, SVGasked investors to do nothing until it had filed its results.
On Friday HarbourVest said it continued to believe that itsoffer was offered full value to SVG shareholders and urged themto accept, given the absence of a higher cash offer.
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 and David Goodman)
