3i Group Share News (III)

(Adds detail) By Steve McGrath and Jessica Hodgson Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Listed private equity fund Candover Investments PLC (CDI.LN) Friday said takeover talks with an un-named suitor had ended after the bidder was asked to clarify its position. The talks, which a person familiar with the matter confirmed were with Canadian pension fund Alberta Investment Management Co., or Aimco, broke down after some Candover bond-holders failed to agree terms on their bonds with Aimco on the change of control which would be triggered by a takeover. By 0820 GMT, Candover Investments' shares were trading down by almost 1% at 665 pence, following a fall of over 50 pence Thursday on speculation the deal was close to collapse. Candover's shares have fallen from a high of over 2200 per share just two years ago. The break-down in talks mean Candover, one of the highest-profile private equity victims of the credit crisis, is again facing an uncertain future, despite its success Thursday in selling Ontex, a Belgian diaper-making firm. Alberta Investment Management in April proposed supplying fresh capital to Candover, whose ability to complete deals was hampered by a financing crisis in 2009. The company ran into trouble because it was holding a lot of debt on its own balance sheet and the balance sheets of its portfolio companies. When the financial crisis caused stock prices to plummet and credit markets to freeze, it was forced to slash the value of its assets. Candover Investments failed to meet a EUR1 billion commitment to a 2008 fund, stopped investing and limited its focus to remaining assets, which include oil services company Expro International and Swedish bedding manufacturer Hilding Anders. Candover wasn't alone: several publicly-quoted companies in the private equity sector, such as 3i Group PLC (III.LN)and SVG Capital (SVI.LN), that had taken debt onto their own balance sheets as well as at their underlying portfolio companies, found themselves in treacherous waters during the financial crisis when plummeting stock prices and frozen credit markets forced them to slash the value of their assets. Candover Investments' accounts were strengthened this week by asset sales by its buyout arm Candover Partners. Most recently, Candover Partners sold Ontex to U.S. buyout company TPG and Goldman Sachs Group Inc. (GS) for about EUR1.2 billion, providing EUR12.1 million and further profit from the Candover 2001 fund to its largest investor. Candover said its share of the proceeds "will help improve the company's liquidity at a time of high volatility in markets and weakness of the euro, the reporting currency of the Candover Funds." However, another planned divestment for Candover has run into potential problems, people familiar with the matter told Dow Jones Newswires earlier this week. Candover has been forced to put the planned sale of Spanish theme park operator Parques Reunidos on ice until after the summer. Bidders for the asset, which include Providence Equity Partners, Apollo Management L.P., and Advent International Corp. and Carlyle Group L.P., bidding together, want to see if Parques Reunidos meets its budget targets, a key concern while Spain's economy remains in the doldrums. Candover originally planned to float Parques Reunidos and in May hired JP Morgan Chase & Co. (JPM), Credit Suisse Group Inc. (CS) and Morgan Stanley (MS) to run the process. Candover bought Parques Reunidos for about EUR900 million in 2007 and had been hoping to sell the business for around EUR2 billion, according to press reports. (Marietta Cauchi also contributed to this article.) -By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com (END) Dow Jones Newswires July 16, 2010 04:27 ET (08:27 GMT)