2 bites of the same cherry

There is a lot of discussion about what deal may or may not be announced. I think it highly likely that a deal of sorts is done and that ISF shareholders get the AEJ treatment, possibly 10 cents per share to support the transaction, with the threat that if not supported they get zero as it folds. I am not a shareholder of ISF but do hold a lot of OCP. If such a deal is done, i.e. around the 10 cent level, then ISF shareholders who have made money could well have a look at rolling it into OCP. I was buying OCP in the $1.20-1.30 range on the back of an NTA of $1.80, excluding any value for its ISF shares and Isoft convertible notes. The February NTA breakdown was as follows;
Cash 30 cents per share
Signature Security 90 cents per share
Baycorp 55 cents per share
ISF shares 17 cents per share (@ ISF 5.8c share price)
ISF con notes 23 cents per share.

Note that they have announced sale of Signature for an amount, if completed, equal to their book value of 90 cents per share. Furthermore if they get a deal at 10 cents on ISF that will give them 52 cents per share (29c for the shares and 23 cents for the notes). For every 1 cent above 10 cents on ISF shares, is worth 3 cents a share to OCP share holders.

All up that would leave OCP with cash of $1.72, plus their interest in Baycorp (in the books at 55 cents per share). They hold a 50% interest in the Baycorp business with the other 50% owned by another private equity fund. I feel that if Signature and iSoft do go, then this paves the way for OCP to buy the 50% of Baycorp not owned and have 100% of Baycorp as its sole operating asset. Great business, very similar to Collection House.

In my view it is not beyond possibility that OCP share holders receive the last traded price ($1.50) in cash and have a free carried interest in a very vibrant business which could be worth a further $1.00 per share.

Think about it when the ISF position becomes a known and these stocks come back on the boards. It may be an opportunity to take 2 bites at the same cherry!

Good luck to all

Relaxan