RE: Take over target27 Feb 2022 20:56
A post from Twitter (9th Feb), not mine, but a good Sunday night read for those that haven’t seen it…
“Road to a Buyout. How I think we got here.
Jan Open £2.30 Jan Close £1.32
In mid January with the SP tanking MM decides
thats it, he's had enough. He approached GS
about brokering a buyout. GS then sell 4.1m
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, but the SP declines further with
their 32m plus Steves 6m. 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 as I see it, 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
for PE to be involved, given we are presently at
MC £1.8bn (SP£1.30) Therefore it follows that Softbank would need to exercise their option and THG Spin Off Ingenuity with a theoretical MC of £4.5bn. Softbank pay
£900m and THG shareholders get shares 1:1 in
the new company with each share theoretically
worth £2.63.
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 GS new
target price of £2.75.
£2.63(share) + £0.65 + £2.75 = £6.03 (£3.40 cash)
MM gets THG delisted and Ingenuity on NYSE.
Softbank get Ingenuity, well 20% anyway.
PE gets the ecommerce parts for about x1.5 Rev
Shareholders get £3.40 cash + £2.63(???) Share. E
I have no basis to believe any of this will happen
but it is the only way I see the buyout happening
with Softbanks presence. If Softbank walk away
then any offer price is possible as only Sofinas
purchase on 22" Nov at £1.90ish applies for the
Takeover Code.”
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