June 19 (Bloomberg) -- Candover Investments Plc jumped 12 percent in London trading after it agreed to sell Wood Mackenzie Consultants Ltd., raising about 36.2 million pounds ($59.2 million) in cash for the private equity fund.

Candover agreed to sell Wood Mackenzie to leveraged buyout fund Charterhouse Capital Partners LLP in a transaction that values the energy advisory firm at 553 million pounds including debt, the firm said in a statement today. Candover traded up 31 pence to 300 pence, paring its loss this year to 64 percent.

The sale will raise cash for Candover Investments, which invests in funds managed by Candover Partners Ltd. Candover Investments canceled a pledge to invest 1 billion euros ($1.4 billion) in Candover’s latest fund in February as cash for investments dried up. Last year, it spent three times more buying companies than it earned from asset sales, prompting JPMorgan Cazenove analyst Christopher Brown to question the firm’s survival.

Today’s sale may “soothe the market’s fears” and “have a transformational impact on Candover’s balance sheet,” Iain Scouller, an analyst at Oriel Securities Ltd. in London, wrote in a note to clients. “The shares could continue to re-rate significantly given the improvement in the cash position.”

Charterhouse’s bid beat offers from private equity firms Hellman & Friedman LLC, Warburg Pincus LLC and Bain Capital, people familiar with the transaction said June 9. Candover had sought about 650 million pounds from the sale, the Financial Times said May 29 without saying where it got the information.

Bonnyman’s Charterhouse

Charterhouse, led by Gordon Bonnyman, is investing a 4 billion-euro private equity fund it raised in April. The firm became independent from HSBC Holdings Plc in 2001. HSBC and Nomura Holdings Inc. advised Charterhouse. Goldman Sachs Group Inc. counseled Candover.

Charterhouse will use 230 million pounds of debt financing provided by Lloyds Banking Group Plc, Nomura and HSBC, according to two people familiar with the deal who declined to be identified. Candover agreed to provide a 20 million pound loan to the buyer, they said.

“Candover’s stabilization program continues to make progress,” Chairman Gerry Grimstone said in today’s statement. “The proceeds from this sale bolster our cash reserves.”

The firm has also said it’s complying with its covenants and expects to do so throughout 2009, a spokesman for the firm said on June 2. In April, Candover said it had received takeover offers and had started talks with potential bidders.

“We think the improvement in the balance sheet means it is less likely that the board and shareholders will accept a ‘low ball’ bid for the company,” Oriel’s Scouller said.

To contact the reporters responsible for this story: Anne-Sylvaine Chassany in Paris at achassany@bloomberg.net

Last Updated: June 19, 2009 11:59 EDT