RE: DLAR getting close to deal done16 Apr 2025 09:21
Simon Thompson in Investors Chronicle gives CRS a push this morning:
Top-performing fund Crystal Amber (CRS:127.5p) is set to reap a hefty cash windfall from the takeover of De La Rue (DLAR:130p).
Funds managed by Greenwich-based Atlas have offered 130p a share in cash for the banknote printer and authentication group. It values the company’s equity at £263mn and Crystal Amber’s holding of 31.35mn De la Rue shares at £40.7mn, or £4mn (5.9p) more than the valuation embedded in the fund’s last reported net asset value (NAV) of £124mn (182.55p).
The recommended bid has already received irrevocable undertakings and letters of intent from shareholders representing 40.3 per cent of the shares in issue. Subject to shareholder approval, the acquisition is expected to become effective in the third quarter of 2025. As previously noted when I suggested buying Crystal Amber’s shares, at 117p, in my 2025 Bargain Shares Portfolio, the closed-end investment company plans a substantial cash return to shareholders.
Cyrstal is the best-performing UK small-cap closed-end fund over the past 12 months (55 per cent return) and five years (234 per cent) according to Trustnet. And, with the shares priced on a 33 per cent discount to NAV, it makes sense for some of the cash windfall to be used to make on-market NAV per share accretive buybacks. It would not only drive up the share price, but narrow the discount to book value – a win-win for all shareholders.
In the meantime, Crystal Amber’s investors will be eagerly awaiting the next update from the fund’s largest investment, Massachusetts-based Morphic Medical. The medical device company is in talks with strategic investors to sell an equity stake and enter sales and distribution agreements. The unlisted holding accounts for around 60 per cent of Crystal Amber’s NAV at current exchange rates. Ahead of that announcement, the shares remain a buy.
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