Unanimous Rejection of CFE’s Mandatory Cash Offer

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

27 January 2022

CIP MERCHANT CAPITAL LIMITED

("CIP" or the "Company")

Unanimous Rejection of CFE's Mandatory Cash Offer

Further to the Company's announcement of 17 January 2022 in relation to the, hostile, mandatory cash offer by Corporation Financière Européenne S.A. ("CFE") at a price of 55 pence per Ordinary Share, the Board announces, having duly considered the Offer and consulted with its financial adviser, Strand Hanson Limited, that it unanimously and unequivocally rejects the Offer.

The Board continues to believe that the Offer significantly undervalues the Company and its future prospects.

The Board would note that the Offer Price represents a significant discount of approximately 37.5 per cent. to CIP's latest weekly unaudited NAV of 88.04 pence per Ordinary Share as at 21 January 2022.

In addition, as previously noted, 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 of 52.8 pence, for the 12 month period to 13 January 2022.

The closing mid-market price of the Company's Ordinary Shares has been at, or above, that of the Offer Price on all of the 8 complete trading days since the Offer was announced, suggesting to the Board that the market believes that this Offer undervalues the Company. Accordingly, the Board believes that the Offer has a highly limited chance of success, despite CFE's shareholding in the Company of 31.8 per cent. and the requisite acceptance condition for its mandatory cash offer, being the receipt of acceptances, together with CIP shares held or acquired by CFE or any persons acting in concert with it, carrying more than 50 per cent. of the Company's voting rights.

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 further confirms that, at no point in the period immediately prior to the launch of its hostile, mandatory cash offer, did CFE attempt to contact the Board to discuss the proposed transaction or to seek to discuss what level of offer might garner a recommendation.

In addition, the Board would draw shareholders' attention to the fact that, subsequent to CFE being required to make its Offer, no substantive communication has been forthcoming from CFE or its advisers, despite numerous attempts by the Board to contact CFE to discuss the Offer.

Accordingly, the Board continues strongly to advise shareholders to take no action in respect of the Offer at this time.

The Board will be sending a circular (the "Defence Circular") to shareholders, with its formal response to the Offer, including more details on the reasons for its unanimous rejection of the Offer, in due course once the Offer document (the "CFE Offer Document") has been posted to shareholders, by CFE.

This announcement has been made without the prior consent of CFE. Further announcements will be made as and when appropriate.

Any shareholders wishing to speak to the Board with regard to the Offer are welcome to do so and are advised to contact the Company via the Company's Fund Administrator at [email protected].

Terms and definitions used in this announcement shall have the same meanings as ascribed to them in the Company's response announcement of 17 January 2022 unless otherwise stated.

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.

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 28 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.