US fund abandons bid for embattled Candover Investments

The US pension fund that had been in discussions to acquire Candover Investments has terminated the discussions.

Candover had opened a discussion with Alberta Investment Management. The deal has appeared to have faltered because private bondholders in Candover would not back the deal.

The trust was among the worst-hit by the credit crunch and has been struggling to off-load some of its core holdings. It did manage earlier this week to agree a deal to sell top-five investment Ontex, a Belgian nappy manufacturer, for £1 billion. But this still represents a loss of 30% for the trust.

Bondholders in the trust had a clause offering them repayment in full if there was a change of control. It is though the US fund was instead asking them to rollover.their positions.

The company has seen the value of its portfolio fall by 29.3% over the past three years. It share price is down 64.79% despite a triple figure rally over the past year and it is trading at a 32.8% discount indicating investors still do not believe the prospects of its portfolio are in the price.

The group now faces the task of muting the pain felt by its investors through the sale of much of what remains of its portfolio.