Article about ECL in The Australian

From the Weekend Australian 9 December 2023. Shame old mate got the IP value wrong (it’s actually >$25.3m) and also seemingly didn’t notice the obscene franking credit pile that could be used to pay out >$3/sh fully franked. Next time Eli, call me before you publish.

Big deal

If cash is king then Excelsior Capital reigns supreme among the ASX's board of little-known microcaps.

Shareholders in the sleepy firm are rejoicing after it announced a deal to sell its electrical cable division, called CMI, to IPD for as much as $101m.Keep in mind this was against a market cap of just $79.75m for Excelsior the day before the sale announcement was made. Oh, and by the way, Excelsior also owns a small investment portfolio worth $22.98m of which $17.83m is held in cash. It also has access to tax losses of around $32m, which can possibly be used against any capital gains on the CMI sale.

Currently the Excelsior share price is sitting at just under $2.90 to give it a market cap of $82.9m. The sale deal with IPD is for $92.1m in cash, with a further $8.9m to be paid later, subject to the CMI business clearing certain performance hurdles.

The investor rejoicing the most right now is probably Excelsior's largest shareholder, Leanne Catelan, who owns 51.33 per cent of the company and is the daughter of the late property data mogul and RP Data founder Ray Catelan.According to ASX documents, Ms Catelan had last bought more shares in Excelsior in late 2020 but then between November 28 and December 1 this year she bought around 322,000 shares to lift her stake from 50.22 to 51.33 per cent.The deal to sell CMI was done on the morning of November 28 before the market opened, with Ms Catelan buying up shares a few hours later.

There is no suggestion of any wrongdoing here.

Interestingly, Excelsior shareholders told Margin Call a week or so before the IPD deal was announced that a stockbroker was trying to get large parcels of stock in Excelsior for an anonymous client. Who that client was remains unknown.

Ms Catelan is a canny investor, or just lucky, or born into the right family. Recently she was reported to have sold her Potts Point grand Italianate mansion "Bomera" to billionaire steel tycoon Sanjeev Gupta for $34m. The Catelan family also once owned Dajoshadita, the multimillion-dollar 33m yacht owned by late flamboyant Sydney stockbroker Rene Rivkin.

But back to Excelsior.Somewhat happy is another large shareholder, former merchant banker Peter Murray, who runs twin ASX-listed investment companies London City Equities and Imperial Pacific. In all he oversees a 12.3 per cent stake in Excelsior, making his businesses Excelsior's second biggest shareholder.

We say "somewhat" happy because what Ms Catelan and her chairman, lawyer Danny Herceg, plan to do with that $101m cash is anyone's guess and a mystery to Murray.Margin Call contacted the offices of Excelsior to speak to Catelan and Herceg. Neither responded - still celebrating?For how long can the Excelsior cashbox trade at a discount to its cash before it attracts a takeover bid or the board decides to pay a monster capital return?Time will tell.