"Following the implementation of the scheme of arrangement for iSelect Group (ASX:ISU), the Deep Value Fund received the cash proceeds of the scheme. The timing of this cash is favourable given the opportunity set currently available in the Fund. However, the cash received will not be anywhere enough to capture the entirety of the opportunity set. We estimate there is a $25m total opportunity set of underweighted and undervalued high quality growth assets that are currently priced erroneously by the market. We will explore ways to increase our cash holdings to capture this opportunity set."
The Deep Value Fund was at 1.7% cash at the end of December. If they accept the scheme, this would provide them with the cash to buy other undervalued growth stocks as they mentioned. So while they believe the scheme slightly undervalues MSL, they may accept, take the hit and buy other stocks they deem cheap.
On the other hand, this didn't stop them from opposing the ReadyTech takeover or deploying the little cash left in their fund to buy more MSL at ~29c.
MSL Price at posting:
28.0¢ Sentiment: None Disclosure: Held
