Member Info for HopeGreedNothing

Can someone tell me why are we giving a job to princess Fiona from a land Farr Farr away. If we are selling the business?

That’s if Apollo likes what it sees of course, they may just walk away.

Apollo is made from the very people, MM has voiced his displeasure about. Wall Street types. So a tad contradictory that he should agree a deal with them especially after his Christmas Special.

Because a non binding offer of 1.70 was rejected before because it was determined to undervalue the company, does not mean a cheaper price cannot be agreed. The world has moved on and so should everyone who is still hung up on the previous 1.70.

Unless Apollo offer big, then hard to see a deal with them going through. Are they willing to pay up?

Apollo could buy THG debt as a way in the back door, then force changes, so MM going to need a good plan B.

Just spit balling.

Nothing is a given, we have been on this roundabout before.

WS - it’s the last instruction on a Take That dance routine. That Gary Barlow was a right control freak, not only wrote the songs but wrote the choreography as well.

Pretty good on the old violin to boot.;)

And a high blood pressure.

I have been talking to animals for decades now and can understand their responses, you would know me as Dr Dolittle, I have a world wide network of animals feeding me information on a daily basis.

AM - where’s the fun in that:)

Thought the lamb shanks were coming to the SP party.
Maybe they all still running around screaming The British are coming, The British are coming :)

WT - why would they have sold? Short term holders with no vision.
This company will be worth a fortune in years to come. If it’s going private then only at a fair price otherwise happy to wait, would get more in the end.

Replace good, with ‘could’
Would certainly not be good.

It’s public negotiation, but if there is any fact at all in the second article around the 100% premium, then on Monday share price was in the 66p range, so that would make Apollos opening offer around 120p/130p.

Not sure if implication’s for us retail shareholders are good if Apollo take private route with institutional shareholders being brought along. The article states this isn’t an option for some institutional shareholders, but which ones and what’s their stake? Good it be agreed at a low price and retail gets screwed?

Time will tell.

One of THG’s activist investors believes its shareholders would shun the recently announced takeover approach made by private equity firm Apollo Global Management, even at a premium of 100%, according to the Telegraph.

The ecommerce giant this week revealed Apollo had tabled a preliminary offer for the company which has listed 90% of its value since its disastrous listing on the London Stock Exchange (LSE) in 2020.

Under takeover rules, Apollo has until 15 May to make a concrete offer for the brand.

Sparta Capital recently became the second activist investor on THG’s shareholder register. City sources claimed that Sparta believed shareholders would not be in favour of an offer for the company even at a significant premium.

The sources told the Telegraph that Apollo could potentially explore a take-private deal that offered investors shareholdings in the private business

This means investors would benefit from operational improvements implemented away from public markets.

Private equity firms often look at these deal structures to win over shareholders.

However, not all institutional investors are able to take part and benefit from the upside in future years.

Earlier this week, THG has posted widening losses of almost £500m despite saying profitability had improved in the first quarter of its current year.

In its full year, sales crept up 2.7% to £2.24bn at the online retail group, however, operating losses hit £495.6m, up from £137.5m last year.

Retail Gazette
THG shareholders ‘would reject Apollo takeover approach’
By Aoife Morgan - April 20, 2023
THG
// THG activist investor Sparta Capital claims shareholders would dismiss Apollo takeover approach

// The group received a preliminary offer from the US private equity giant on Monday

A THG activist investor has said the group’s shareholders would reject a takeover approach from Apollo Global Management even at a significant premium.

On Monday, the group confirmed it had received a preliminary offer from the US private equity giant which now has until 15 May to make a formal proposal.

Sources told The Times that Sparta Capital, the group’s newest activist investor, believed shareholders would not back an offer for the company after it also received bids from Belerion Capital and property mogul Nick Candy.

Sources said Apollo could explore a take-private deal that offered current investors shareholdings in the new business.

This would allow investors to benefit from operational improvements implemented away from the eyes of the public market.

THG has grown into a business with more than £2.2bn in sales since its £4bn debut on the stock market in 2020.

However, the group revealed this week its losses had more than doubled to £496m dragged down by a £275.4m non-cash impairment and £69.3m of non-recurring costs.

Founder and chief executive Matthew Moulding took to LinkedIn on Wednesday in a social media rant taking aim at institutional investors, stockbrokers, analysts and the media.

Hex - been in since the first potential takeover and got trapped, but seems to be a target for PE or maybe MBO, the world has changed since, so in my sceptical mind, the potential upside has been lowered. May well get trapped again (time wise) but have a lower average than previous. I like to gamble so all or nothing for me :).

They are a D2C set up. Expensive business lots of capital. Own protein and beauty amongst other things. £2.2b rev. But struggle to make good margins and positive FCF, hefty debt pile, governance issues the list goes on.

As I say I like to gamble:)

Hex - don’t know if you are in it or not and this is certainly not a recommendation, and 100% not financial advice but ironically I was rudely going to ask you about the number situation of THG, mainly around carrying over tax deductibles before having to pay tax on profits given your knowledge base, but I chickened out, I’m sure you have better things to do will your time. There is talk of 500mill.

Thg have been here before re potential offers and it didn’t pan out, so danger it may not again. And by no means not without its issues. CEO likes to hand out shares like candy at Halloween. :).

Atb.

Hex - I understand dilution is a necessary evil, however I would seriously question the timing and frequency of dilution that this company opted for and how it wasted all our money. The man was out of his depth. This is someone who claimed he want to have total control of his own destiny, as it were, yet played into the very hands that wanted to take that control a way, a make him a puppet on a string by saddling the company with debt. This company had the opportunity to grow relatively debt free, but the plans were over ambitious and lacking any proper risk management. Excuse any inaccuracies but my memory maybe slightly jaded on some finer details. Wasted money on land purchases, wasted money on partnerships (name escapees me), can’t remember if they paid intel which now in all likelihood will not to bear any fruit given intel ceasing making chips for mining. Set up a gambling unit (argo labs) in middle of a bear cycle, how much money was lost there? Built a ducking massive ‘shed’ all the time knowing they did not have the capacity to fill it. Dismissed hosting for whatever reasons. Moved to texas a state offering potentially cheap electricity, (with no agreement in place) where the weather fluctuates from one extreme to the other and enjoys the odd hurricane or two. Now texas about to shaft all the miners that flocked there with this bill seemingly. Talked BS about being a green miner. Hex the list goes on and on. While you could put a generous 20% down to hindsight, the other 80% could be seen coming from a mile away. Bad ducking management that’s what it was plan and simple

The texas bill could almost make you think that someone else is pulling the strings, who has no love for BTC. Even the big chipmakers are starting to distance themselves, but that could be purely down to money, but it’s not like there is no demand overall difficulty is still on an upward trajectory is it not.

Hex - amazed to read your willingness to so readily accept dilution.
If the company was run properly by a competent person then there would have been no need for half of it.
Fully agree on a more balanced approach and proper risk management, but the long and the short of it, is that it was no existent and the blame for that, falls at the feet of only one person.

TC - could not agree more, bad management decisions 100% the reason for this companies demise.