RE: The week ahead5 Jun 2022 16:09
A post from February with a few updated points… just another theory…
In mid January with the SP tanking MM decides thats it, he's had enough. He approaches Goldman Sachs about brokering a buyout. GS then sell shares on 18 Jan to take them below 3% threshold. This allows them to quietly dispose of the remaining 32m shares without the SP damaging TR-1. I’m assuming they can’t hold 32m shares while brokering the deal as surely it would constitute a conflict of interest.
Interested parties found and introductions arranged, meetings take place, discussions not at a ‘material’ stage. Story breaks Fri 4 Feb with SP-£1.25.
The problem with the MM & Friends & PE buyout scenario, is that MM & Friends includes Softbank with their Ingenuity option. The presence of Softbank would require a takeout price of £5.96 per the Takeover Code, as that was Softbanks buy-in price May 21. £5.96 would give MC £8.2bn, which seems a lot based on the current position.
Now we’re past May, and the world is in a different place, Softbank exercise a renegotiated option and THG spin off Ingenuity with a theoretical MC of £3bn. Softbank pay £900m for 30% and THG shareholders get shares 1:1 in the new company with each share theoretically worth £1.75.
What remains of THG has now got £900m cash which it can issue as a one off dividend of 65p per share.
What remains gets flogged off to PE, at price of £2.50 (the magical number MM wants!).
£1.75 (share) + £0.65 + £2.50 = £4.90 (£3.15 cash) MM gets THG delisted and Ingenuity on NYSE. Softbank get a better deal on Ingenuity, given the market conditions.
PE gets the ecommerce parts for about x1.5 Rev Shareholders get £3.15 cash + £1.75 Share.
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