Candover Investment Trust - partial realisation of major asset
Following the float of Parques Reunidos (PR), Candover has sold 7.7% of its holding in PR for €3.4m. This values the entire stake at €44.2m (£35m) based on the float price. This compares to the December balance sheet valuation of £43m. This shows a 20% fall. Not good.
The remaining holding is locked up for 180 days, however this never seems to stop the investment banks breaking these so called lock ups.
I am totally disappointed by this price, usually I expect that assets floated should see an uplift in price as the discount for illiquidity is expunged, especially one that was only valued 4 months ago. Looking at the European stoxx 600 index, it is off a bit YTD and comps like Merlin are relatively unchanged. To me this is a very poor price and one should question the pricing committee. Just how conservative are they?
This is a poor result, however all is not lost.
Candover only disposed of 7.7% of its stake. It retains the other 92%. The shares may do well in the aftermarket and thus recover some lost ground. Floats should be priced to go up in the aftermarket....(hmm I'm grabbing at straws here)
My new NAV is around 170p based on the current PR price. That rises if PR price rises post float (tomorrow).
In the meantime I am holding on.
At risk of being a Jeremiah, this can't be the first time we've been let down by the Private Equity boys and girls rose tinting a prospective valuation only to be let down by the eventual realisation. Looking on the bright side, we can at least take it as a contra indicator that we're not yet in a run away bull market!
Gus.
