I highlighted the possibility of mergers & acquisition activity in my column a week ago when I rated the shares a buy at 200p ('A quartet of small-cap value buys', 28 Dec 2016), having previously advised buying at 198p in the autumn ('Riding small-cap bumper gains', 24 Oct 2016) after initiating coverage at 88p ('Hyper value small-cap buy', 22 Jan 2012).
It's proved a great investment for shareholders, too. Following a strategic review carried out by investment bank Canaccord Genuity, American global financial services company BGC Partners is acquiring Besso for an enterprise value of £70.5m, placing a value on BP Marsh's equity holding of £20.6m. To put this sum into some perspective, it's £500,000 ahead of the last valuation in BP Marsh's accounts, 48 per cent higher than the carrying value when Besso commenced a strategic review, and a thumping sevenfold increase on its original £2.8m investment. BP Marsh also has a £1.36m loan outstanding to Besso which will be repaid on completion of the deal. As a result, BP Marsh will have about £18.4m of cash available for new investments after transaction costs and tax, representing 25 per cent of its last reported net asset value (NAV) of £73.8m, or 253p a share.