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CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

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SKYSHIP
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CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#441590

Postby SKYSHIP » September 12th, 2021, 11:54 am

I hold two small investment companies - PRIM with a MCap of just £6m and a current NAV discount of 38.2%; and CIP Merchant Capital (CIP) with a MCap of £32m and a current NAV discount of 37.7% There is a separate thread on PRIM.

# CIP is mainly invested in UK listed stocks - PRIM wholly invested in private pre-IPO cos.

# The investment managers of CIP hold 8.2%; The Exec. Chmn of PRIM holds 23%

At current levels the Risk/Reward ratio for both seems highly attractive.

There is an added interest in CIP in that another fund held 15% and earlier this year made a rejected lowball bid at 55p versus the then NAV of 81p.

They have been buyers since and now own 29.2% - just below the 30% level when another bid will be required. The shares on offer at 60p versus the 93.93p NAV. I suspect a bid in the range of 75p-80p might win the day this time around.

That would of course mean minimally 25% upside :)

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Re: CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#441629

Postby SKYSHIP » September 12th, 2021, 2:06 pm

MORE INFO on CIP:

# This is a Simon Thompson (IC) favourite; selected for his Bargains portfolio of 2020

# I take issue with him however regarding the Italian "Mafia" duo investment managers.
They operate on the successful 2/20 hedge fund remuneration formula. (2% fee + 20%
of profits). This for a couple who over the 3.5yrs to Jun'21 actually lost 3%. Over that
period my 93y/o stepmother has gained 5.6%pa; whilst I have compounded at over 20%pa!

# Those mafiosi managers also charged fees on cash balances!!! Totally verboten as far as
most people now think.

# So the Chmn has to step up to the plate and earn his fees by kicking them out. This week
they stepped down from the Board; but still serve as managers . That has got to stop.

Obviously Corporation Financière Européenne S.A (Luxembourg), now holding 29.14%, are
of a similar mind!

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Re: CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#448445

Postby SKYSHIP » October 7th, 2021, 8:19 am

5TH OCT. - Simon Thompson re-tips in the IC Online - perhaps in tomorrow's print edition.

He concludes with:

"The current 40 per cent share price discount to NAV not only fails to recognise the dramatic improvement in CIP’s investment performance this year, but the possibility of M&A activity. Buy."

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Re: CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#460107

Postby SKYSHIP » November 22nd, 2021, 1:46 pm

Simon Thompson's tip at the beginning of October provided a good opportunity to bank a swift profit as they peaked at 92p bid.

Since then they've drifted back and today are standing at 52p-54p. At 54p they are on a 40.2% discount to the 12th November NAV.

They could be considered a value trap; however it is my experience that in the vast majority of cases a 40% discount
represents a very attractive entry point. So having sold 2/3rds of my holding in the 60s; I'm buying back in...

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Re: CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#473218

Postby SKYSHIP » January 15th, 2022, 6:51 am

Firstly, I see a typo in the last post - 62p bid, NOT 92p bid!

Anyway, news after hours yesterday - the 29% stakeholder CFE has made an offer of 55p/share.

55p is a derisory offer considering the NAV of 87.6p. Obviously not a serious offer and surely they
don't expect many acceptances at such a paltry level.

So what are they really up to I wonder. I don't see a white knight here as who would want to go to
the expense of bidding for such a ragtag of assets.

SFE are stuck with their holding; so surely best to make a more sensible offer, win it, liquidate it
and move on. So pay a little more and get the thing done; but 55p - NO WAY!

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Re: CIP Merchant Capital (CIP) - an investment co. on a 38% NAV discount

#486972

Postby SKYSHIP » March 16th, 2022, 4:20 pm

Been a long time coming, but CFE finally realise they won't get across the line with their 55p bid.

Today they raised the level with a Final Offer of 60p. I believe that will win the day as recent accumulator
Castellaine Capital will surely accept with their 9.6% stake.

Hardly generous versus the 84p NAV; but anyone who bought in should either sell in the market (currently 60.5p bid)
or accept the offer. If it fails CIP will surely fall back to 50p again.


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