June 27, 2016
Board of Directors
Equus Total Return Inc.
700 Louisiana Street - 48th Floor
Houston, Texas 77002
Board of Directors
MVC Capital Inc.
287 Bowman Avenue - 2nd Floor
Purchase, N.Y. 10577
I am a concerned shareholder of Equus Total Return Inc. ("Equus") with approximately 150,000 shares. The agreement of reorganization between Equus and MVC Capital Inc. ("MVC") appears to have been mired in a quagmire of stagnation since 2014. Equus in reliance has liquidated much of its assets and has been dissipating its cash with disproportionate operating expenses based on its market value, which has been a detrimental to its shareholders.
I would humbly recommend that Equus use its cash to tender for its shares. This would be beneficial to MVC as well as the other existing shareholders. Based upon market price, this tender of shares would produce an immediate incremental increase in net asset value per outstanding share. Equus has enough cash to absorb any and all shares tendered by MVC, giving MVC the option to elect to terminate its relationship with Equus or to continue with the proposed reorganization. MVC would have the freedom to rethink its investment in Equus and its decision would provide more clarity to existing Equus shareholders who would finally have some assurance as to the termination or continuation of the proposed reorganization.
This is a win-win situation for all parties which can only result in an increase of the net asset value per share of Equus and a greater transparency as to its future. I am a retired attorney residing in Miami who has no further interest other than enhancing my investment.
Robert L. Lewis
Disclosure: I am/we are long EQS.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I own 150,000 shares of EQS and the letter in the article was written and sent by the author