CIP Merchant Capital Ltd - AIM-listed closed-ended investment company incorporated in Guernsey - Says Corporation Financiere Europeenne SA offer is "opportunistic" and says the bid "significantly undervalues" the firm.
At end of January, CFE made all-cash offer at 50 pence per CIP share. The offer is at an 11% discount to CIP's closing price of 56 pence the day before offer. CFE made an initial approach to the board on September 29, and a second approach on December 2, which were both rejected. CFE, a trading house focused around special situation opportunities, currently has a 6.9% shareholding in CIP.
Speaking Monday, CIP says: "The board believes that the opportunistic nature of CFE's possible offer has been recognised by the market and clearly reflected in its reaction to the possible offer with the company's middle market closing share price being at a significant premium to the possible offer price of approximately 10% to 19% between January 27 and February 12."
"Adjusting the possible offer price and the latest NAV to exclude the significant cash and near cash equivalents held by CIP further illustrates that the possible offer price fundamentally undervalues CIP, with the cash adjusted possible offer price representing a significant discount of approximately 58.6% to the cash adjusted NAV," company adds.
As a result, CIP reiterates its strong advice that shareholders should take no action.
Chair Adrian Collins says: "The possible offer price clearly significantly undervalues CIP and its underlying investment portfolio on all reasonable metrics and CFE's opportunistic proposal has been unequivocally rejected by the board on a number of occasions for this very reason.
"We believe in the growth potential of our investee companies and the investment manager's ability to identify further attractive investment opportunities, particularly in the current uncertain market environment, with the aim of generating future long-term value for CIP's shareholders."
Current stock price: 54.00 pence, down 13% on Monday
Year-to-date change: up 6.9%
By Paul McGowan; paulmcgowan@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.