Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hosai, this is from the AGM announcement, not sure they'll be published:
We recognise that some shareholders may prefer not to attend the Meeting in person and have therefore made provision for such shareholders to submit questions in advance of the Meeting: questions should be emailed to AGM@thg.com by no later than 12:30 p.m. on 1 June 2022.
We will consider all questions received on or prior to this time and, if appropriate and relating to the business of the AGM, we will seek to provide a response by 12.30 p.m. on 7 June 2022. If, due to a change in UK Government guidance, the Meeting is ultimately held as a closed meeting, we will publish answers to such questions, to the extent we consider appropriate, on our website at www.thg.com/investor-relations/ by 12.30 p.m. on 7 June 2022. Please note that some questions may be grouped together.
A few missing pieces today. I totalled 75.4%
(although might have missed some, as I couldn't find Sofina, so used the annual report):
INVESTOR %
Matt Moulding 22.2%
Sofina 9.01%
Balderton 7.94%
Jupiter Fund Management 7.81%
Softbank 6.6%
T Rowe 3.1%
Vanguard Group 2.53%
Qatar Investment 2.24%
Norges Bank 1.72%
GIC Private LTD 1.55%
Richard Griffiths 1.47%
West Coast Capital 1.41%
Sir T Leahy 1.32%
Blackrock 1.26%
Maybank 1.22%
Dominic Murphy 1.09%
Ophorst Van Marwijk Kooy 1.05%
John Gallemore 0.82%
Iain McDonald 0.59%
Kings Street/Belerion 0.25%
Candy 0.08%
Jeffries 0.08%
Charles Butler 0.04%
Zillah Byng-Thorne 0.01%
TOTAL 75.4%
Nine months of speculation, positioning and planning.
Business strong, with continued Sales momentum in FY21 and Q1 FY22.
New chairman with PE experience.
Shared in April they are reviewing ‘what environment is the best environment’ for THG ‘private or public’.
MM and close contacts own 50% of business.
The businesses being prepared for a split in the background on companies house.
Two close contacts of THG announcing takeover interest. (Would MM allow them to disrupt his workforce with a takeover rumour if something wasn’t in play?)
Massive daily UT’s and investors taking big positions.
SoftBank still holding.
Shorts closing (some overnight).
Big PE still to show their hand (ie Advent/Goldman).
We’re heading into a big couple of weeks of RNS’s…
3.30pm Mon 6th - Final position disclosures, inline with takeover code
12.30pm Tues 7th - Answers to questions ahead of the AGM
12.30pm Fri 10th - AGM
5pm Thurs 16th - Final offers, or not.
…and an offer RNS could drop at any point!
Whatever the outcome, it feels like the SP is going in the right direction, fingers crossed. GLA.
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.
I wonder whether Advent (Goldman Sachs) are still waiting in the wings?
I think I'm right in saying we've not seen a Goldman Sachs RNS yet? They reported 2.687% on the 20th Jan.
Advent also seem to be quite active:
24 May - CityWireSelector / Advent International raises $25bn for latest buyout fund. It is one of the largest private equity funds ever raised - https://citywireselector.com/news/advent-international-raises-25bn-for-latest-buyout-fund/a2388250
20 May WDD / Inside Advent International’s Big Beauty Ambitions - https://www.yahoo.com/lifestyle/inside-advent-international-big-beauty-150051119.html
Interesting to document the timeline so far and the names in the frame at various points, feels like it's only heading in one direction:
5th Nov - GQ / MM hinted that he could take the business private 'We do have other options in terms of I’m a big shareholder, more than half of the business is owned by me and a few people that I’m close with'.
10th Dec - Betaville / 'suggested the "event" might include a takeover of the London-listed business led by the company's founder, Matt Moulding, or a spin off of a large division'.
21st Dec - Bloomberg / THG 'is considering options including selling its prize assets — the beauty and nutrition units that bring in the lion’s share of revenue — according to people familiar with internal discussions, who asked not to be named as the talks are private. THG has also discussed whether to take the company private again'.
4th Feb - Betaville / Advent (Goldman Sachs), Leonard Green and Apollo linked to THG talks.
7th Feb - The Times / Verifies Betaville story, although Apollo was unlikely to lead buyout.
18th Feb - Betaville / Advent rumoured to be working with McKinsey on due diligence. 'THG is also said to be working with bankers from Barclays alongside Jefferies to advise on the potential transaction, said people following the situation'.
21st April - Annual Results / THG confirm they have 'received indicative proposals from numerous parties in recent weeks, although unacceptable, failing to reflect value in the group'.
22nd April - Betaville / Carlyle (Bank of America) linked to THG talks.
19th May - Betaville / RNS confirms interest from Nick Candy (Bank of America) and a bid from Belerion Capital and Kings Street (Morgan Stanley). Barclays and Jeffries confirmed to be working on behalf of THG on RNS.
THG still +11% in the last 5 days, which is middle of the pack for the shares I watch. 5 trading days until AGM. Still some interesting RNS declarations to land.
Hold the line.
I hope at the AGM on the 10th of June THG confirm if they are seriously focusing on the bidding process OR moving the business forward as per the proposed strategy (listing/separation/SoftBank). I think either will move the share price forward, but clarity is needed. Hopefully they can continue the momentum they started post the Q1/Year End meeting.
If it's the private route, I thought it useful to look at a couple examples to help with possible timing.
THG's first RNS was 10 days ago (19th May), potentially the start of the process....
If you compare this to Morrisons buy out, the first offer RNS was 21 June by CD&R. Fortress offer RNS landed 3rd July (12 days), followed shortly after by interest from Apollo. The process continued to the final offer RNS 5th Oct (15 weeks).
Compared to Boots, Goldman Sachs were appointed 3rd Dec, Bains first approach was reported 1st Jan. Initial interest had to be then submitted by 24th Feb, and more recently final offers 26th May, and negotiations continue. (25 weeks so far)
Not me B1nky, as I alluded to yesterday, there’s a lot more in play than just the bid speculation, worth researching THG further to settle your nerves.
I also don’t think MM would allow two close contacts to go public with potential offers if it wasn’t part of the plan. He’s been working on this for 9 months. My opinion.
Seven days until the AGM. Whilst a +65% increase in SP over the last two months has felt good, and well deserved, there’s a lot of unanswered questions I’m hoping will be cleared up on the 10th June. What is the strategy for the ongoing business structure… separation of divisions… SoftBank… premium listing… takeover. I know these things take time, but it’s been 6-9 months with little news, and whilst I’m really confident in the THG business performance, even in these turbulent times, I’m eager to hear how they unlock shareholder value and get the value back to +£4. GLA
Latest data shows Beauty Market sales are c. +28% YoY in April, up from runrate of c. +24% YTD. LF look to be holding/gaining share vs total pure play being down YoY (due to covid). Currently I’m not seeing the market slow down, so Q2 feels like it’s continuing momentum.
You can also see inflation being passed on to the customers to help protect profit, I’ve personally had to pay extra for regular products on LF.
Touched my average today, 48k @ £1.248, although had to seriously average down from my highest buy at £1.95.
Thanks for (most) of the contributors for keeping me sane, giving me the continued confidence in THG over the past months.
Now time to hold and ride this back up to its true value. GLA
Hosai, I remember reading a Blackrock annual report which said they exited THG, but at the time it was questioned that it was only one fund.
I assume if they have gone over 3%, up vs the annual report, then we’d also expect an RNS?
Hope the data is correct, as a turnaround from Blackrock feels significant.