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 WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A TAKEOVER OFFER OR AN OFFER OF SECURITIES. NO OFFER OR SALE OF SECURITIES MAY OCCUR IN THE UNITED STATES UNLESS THE TRANSACTION HAS BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933 OR IS EXEMPT FROM REGISTRATION THEREUNDER.

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO UNDERTAKE ANY TRANSACTION WHETHER UNDER RULE 2.7 OF THE TAKEOVER CODE OR OTHERWISE AND THERE CAN BE NO CERTAINTY THAT ANY TRANSACTION WILL PROCEED.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

Statement regarding possible offer for CIP Merchant Capital Ltd ("CMC")

Corporation Financière Européenne S.A. on behalf of funds or vehicles which are managed or advised by it ("CFE") confirms that CFE has previously made an indicative approach to the Board of CMC with a view to entering into discussions in relation to a possible all-cash offer for the issued (and to be issued) share capital of CMC at a price of 50 pence per share (the "Possible Offer").

CFE made an initial approach to the Board of CMC on 29 September 2020, and a subsequent approach on 2 December 2020, in relation to the Possible Offer. The Board of CMC unequivocally rejected the Possible Offer on both occasions.

CFE, a family office trading house focused around special situation opportunities, currently has a 6.85 per cent. shareholding in CMC, which it has held since CMC's admission to trading on AIM in 2017.

Since June 2018, CMC's shares have consistently traded at a significant discount to net asset value ("NAV") and closed trading on 25 January 2021 (being the last practicable date prior to the publication of this announcement) at a price of 56.50 pence per share, representing a discount of approximately 27.61 per cent. to CMC's last quoted NAV per share of 78.05 pence per share (as announced on 26 January 2021(1)).

In addition, CFE considers that the principal benefits CMC and its shareholders should expect from its shares being publicly traded including, access to capital and liquidity for shareholders, are not being achieved and the costs of maintaining CMC's public quote are a drain on CMC's resources.

Therefore, CFE is of the view that it is no longer in the best interest of CMC or its shareholders to remain as a publicly traded company on AIM.

CFE considers the Possible Offer price of 50 pence per share in cash to be fair given it represents a premium of approximately:

· 1.01 per cent. to the closing price of 49.5 pence for each CMC share on 25 September 2020 (being the last Business Day before CFE's first approach letter to CMC);

· 5.26 per cent. to the closing price of 47.5 pence for each CMC share on 1 December 2020 (being the last Business Day before CFE's most recent approach to CMC); and

· 15.48 per cent. to CMC's six-month volume weighted average price of 43.30 pence per share on 25 January 2021 (being the last practicable date prior to the publication of this announcement).

Furthermore, the median daily volume of shares traded in CMC over the last six months was 24,359 shares, which implies that it would take 11.3 days to trade 275,000 shares on market, equivalent to a shareholding of 0.5 per cent. Accordingly, CFE considers that the Possible Offer should be of interest to existing CMC shareholders as, if an offer is made, it would enable CMC shareholders to exit their investment in full for cash.

CFE is willing to consider market purchases of shares from existing shareholders in CIP at a price of 50p per share from the date of this announcement. Should any CIP shareholder be interested in selling their shareholding, they can contact Virginia Bull at Investec Bank plc on +44 20 7597 5970.

Any Shareholder wishing to sell their Ordinary Shares should consult their stockbroker, bank manager, solicitor or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended).

There can be no certainty that any transaction will ultimately be forthcoming.

Pursuant to Rule 2.5 of the Code, CFE reserves the right to introduce other forms of consideration and/or vary the form or mix of consideration for the Possible Offer. A further announcement will be made if appropriate.

CFE reserves the right to make an offer on less favourable terms than those set out in this announcement: (i) with the agreement or recommendation of the Board of CMC; (ii) if a third party announces a firm intention to make an offer for CMC pursuant to Rule 2.7 of the Code, which at that date is valued at a price lower than 50 pence for each CMC share; (iii) following the announcement by CMC of a whitewash transaction pursuant to the Code.

If on or after the date of this announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the CMC shares, CFE reserves the right to reduce the consideration payable under the terms of the Possible Offer for the CMC shares by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Announcement to the consideration payable under the terms of the Possible Offer will be deemed to be a reference to the consideration as so reduced.

In accordance with Rule 2.6(a) of the Code, CFE is required, by not later than 5.00 pm (London time) on 23 February 2021, being 28 days after this announcement date to announce a firm intention to make an offer for the shares of CMC in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

In the event that CFE announces that it does not intend to make an offer for CMC, CFE and any person acting in concert with it will be prevented from announcing an offer or possible offer for CMC or taking certain other action for six months from the date of such announcement, except in the circumstances permitted by Note 2 to Rule 2.8 of the Code and specified in the announcement.

A further announcement will be made as appropriate.

Footnotes:

(1) As disclosed under the 'Releases' section of the CMC website. https://cipmerchantcapital.com/releases/

Enquiries:

Important notices

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on CFE's website at (www.cfe-finance.com) by no later than 12 noon (London time) on 27 January 2021. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

This communication is not intended to and does not constitute an offer to buy or the solicitation of an offer to subscribe for or sell or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction. The release, publication or distribution of this communication in whole or in part, directly or indirectly, in, into or from certain jurisdictions may be restricted by law and therefore persons in such jurisdictions should inform themselves about and observe such restrictions.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdictions.

Investec Bank PLC ("Investec"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK, is acting as lead financial adviser exclusively for CFE and no one else in connection with the matters set out in this announcement and will not be responsible to any person other than CFE for providing the protections afforded to clients of Investec, nor for providing advice in relation to the content of this announcement or any matter referred to herein. Neither Investec 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 Investec in connection with this announcement, any statement contained herein or otherwise.

 Dealing Disclosure Requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent 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 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (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 per cent 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, 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 pm (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 http://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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.