CIP.L Regulatory News (CIP)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION (INCLUDING THE UNITED STATES) WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

For immediate release

17 January 2022

CIP MERCHANT CAPITAL LIMITED

("CIP" or the "Company")

Response to Mandatory Cash Offer by CFE

The Board of directors of CIP (the "Board") notes the announcement made at 4.25 p.m. on 14 January 2022 by Corporation Financière Européenne S.A. ("CFE") regarding its mandatory cash offer, under Rule 9 of the City Code on Takeovers and Mergers (the "Code"), for the ordinary shares of no par value in the capital of the Company ("Ordinary Shares") not already held by CFE (or any persons acting in concert with it), at a price of 55 pence per Ordinary Share (the "Offer Price") (the "Offer").

The Board notes that CFE has previously made a number of approaches to the Company, including via a letter dated 28 September 2020 and a subsequent approach on 2 December 2020, in relation to a possible offer subsequently announced by CFE on 26 January 2021 at a price of 50 pence per Ordinary Share. The Board unequivocally and unanimously rejected such possible offer believing it to be opportunistic and to significantly undervalue CIP's investment portfolio and the Company as a whole. Since the time of CFE's initial approach in September 2020, the Company's weekly unaudited net asset value ("NAV") has increased by approximately 17.2 per cent. (from 25 September 2020 to 7 January 2022, as announced on 29 September 2020 and 11 January 2022, respectively).

The Board further notes that the Offer Price represents a significant discount of approximately 37.2 per cent. to CIP's latest weekly unaudited NAV of 87.6 pence per Ordinary Share as at 7 January 2022. In addition, the Offer Price represents a premium of only 7.8 per cent. to the closing mid-market price of an Ordinary Share of 51.0 pence at the close of business on 13 January 2022, being the last business day prior to the date of CFE's Offer announcement and commencement of the offer period, and only a 4.2 per cent. premium to the volume weighted average price of the Company's Ordinary Shares for the 12 month period to 13 January 2022 of 52.8 pence.

Furthermore, the Board notes that the Offer Price of 55 pence per Ordinary Share represents the minimum level pursuant to the requirements of Rule 9 (such price being no less than the highest price paid by CFE (or any persons acting in concert with it) for any Ordinary Share during the 12 month period prior to the date of its Offer announcement).

The Board, cognisant of its responsibilities to, inter alia, maximise value for all of the Company's shareholders, will give due consideration to the terms of the Offer. As required by the Code, the Board will also be obtaining independent advice in respect of the Offer from its financial adviser, Strand Hanson Limited, and will make the substance of such advice known to shareholders in due course.

Accordingly, shareholders are strongly advised to take no action in respect of the Offer at this time.

Following the announcement by CFE, the Company is now in an "offer period" as defined in the Code, and the dealing disclosure requirements listed below apply.

Enquiries:

Additional information

The information contained in this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (which applies in the United Kingdom by operation of the European Union (Withdrawal) Act 2018 (as amended)). The person responsible for arranging release of this announcement on behalf of CIP is Adrian Collins.

Strand Hanson Limited ("Strand Hanson"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser, nominated adviser and broker to CIP and no-one else in relation to the Offer and/or other matters described in this announcement and will not be responsible to anyone other than CIP for providing the protections afforded to clients of Strand Hanson nor for providing advice in relation to the Offer, the contents of this announcement or any other matter referred to herein. Neither Strand Hanson nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Strand Hanson in connection with the Offer, this announcement, any statement contained herein or otherwise.

Rule 2.9

In accordance with Rule 2.9 of the Code, CIP confirms that as at the date of this announcement, its issued share capital consists of 55,000,000 Ordinary Shares each of which is admitted to trading on AIM. The International Securities Identification Number for CIP's Ordinary Shares is GG00BF8NW879.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available on CIP's website at: www.cipmerchantcapital.com (subject to certain restrictions relating to persons resident in restricted jurisdictions) by no later than 12 noon (London time) on 18 January 2022. For the avoidance of doubt, the content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.