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Either convincing one of the founders/boohoo that this isn't the best way to go (assuming both founders are indeed pro boo) or a private placing at some point between now and Aug 7th to dilute their percentage holding (and ours obv) is the only ways I can see to stop them getting management control.
The "in isolation" statement made me wonder does that mean if it wasn't for that we could re-list in that time but boo are holding us up? Hopefully not but slightly ambiguous in how you read it at-least to me.
Though the opening sentence sounds fairly straight forward - "The board of Revolution Beauty is focussed on ensuring value creation at this critical time for the Company, which is on the cusp of having trading in its shares on AIM restored."
Do Boo not care about their image at all? The only way they would gain "control" here is working with Minto (and the former chair), the guy who obv had to leave for dodgy dealings and fraud and apparently now hides out in Turkey according to Oke.
The only way Minto would agree to a deal with them is with him in a prominent position moving forward (considering he'd be sacrificing his huge % holding in rev b so in a "intentional administration" situation he would have to be being offered a large amount of boo shares (diluting boo holders) and a leadership position. His holding is currently worth £9.3 million. I would imagine he can see his shares going back to IPO position in the not too distant future of 160p if Rev B just naturally stayed listed with no interference which would make his shares worth £78.3 million.
However obv the sp is a lot lower currently and still uncertainty so lets say Boohoo would have to give him at-least £65 million (equivalent to his shares if Rev B gets to 133p) and the same for the chairman. This would mean Boo paying the founders overall £130million- likely in boohoo shares. This would dilute Boohoo by 29.3% at their current market cap. Even then Boo would only have 58.2% of Rev B.
Also I'm not sure Boohoo holders would love having Minto being on the Boo board of directors being pointed out each time by the Business press as they discuss boohoo moving forward (in this scenario).
Still not clear whether the former chairman is still onside with Minto or not.
40% would def not be needed tbf but a 20% raise could be done. If you consider my comparison with peers this could easily go above £1 on resumption of trading fairly quickly.
If worried about Boohoo do a 20% private placing at 85p and we raise £52.7 million plus with the 3.4% dilution would likely have seen off Boohoo even if they had bought more.
Alternatively we let the sp rise and then do a raise later, the amount of the dilution and raise depending on how much its believed Boohoo have bought. If it's believed they have bought a lot more then do a large private placing of say 40% with another party at 60p when the sp has risen to 75p.
We can delay till Aug 7th by my calculation so have time do this.
I think sp will rise a lot out of suspension for reasons already gone over here and comparison to peers etc. Once that happens Boo would have to buy at much higher prices.
There will likely be other buyers interested such as large beauty companies or companies such as THG.
Management incentive shares will dilute us by 3.4% which is even more shares for them to buy.
Potentially we could do a raise even if it's bad dilution down here to further protect from Boo. Could for example dilute by 20% at say 30p and raise £18.63 million in a private placing with another party (think there would def be buyers for that at that price even with us coming from a weaker position in negotiations).
Happy investor it's hard to know where to start with your posts.
Rev B don't need a fund raise. Rev B performance in terms of growth has been better than Boohoos the last few years.
The new team are respected in the city and weren't part of the fraudulent issues.
You seem to think Boohoo shouldn't have bought Rev B. Buying Rev B low was prob the best decision Boohoo directors made recently (in a sea of poor performance - awlbeit against a difficult macro) as they were a great buy.
If Rev B were to match Warpaint valuation (which all things considered Rev B should be higher than) it would put Rev B at £215 million MC or 69.2p a share.
Just 2 years ago for FY21 ELF made £253 million revs, £28 million EBITDA and £4.96 million profit.
Obv these ELF results were slightly better than current Rev B however interesting to note that when ELF reported these FY21 results they were valued at £1.19 billion, despite ELF reporting £38 million net debt at the time, so having over twice Rev Bs current £18 million net debt. This valuation would put Rev B at 383p a share.
ELF is now valued at around £4.55 billion. Obv Rev B doesn't deserve to be valued at ELF MC, they over twice our sales, great growth atm and a much better margin, however even just a 10th of their market cap would put Rev B at £455 million or 146p a share and imo Rev B deserves to be at around a quarter of ELF (equally ELF is overvalued though - so the answer is somewhere in the middle).
Wonder what kind of figure £wise Rev B are trying to get from Minto? (Assuming it's a legit attempt and not some kind of political manouvre).
Arguably him paying Rev while still a negative for him wouldn't be a massive one considering it would surely help his large shareholding in Rev B with the business recouping more cash.
Boohoos suggestions are almost comedic when you think about it. They want to put in Alastair Mcgeorge who is non-exectuve chairman of East Imperial plc which is down 60% in a year and 90% in 5 years.
Also Neil Catto who is an NED at Tinybuild which is down 76% in a year and 85% in just over 2 years when it went public.
They are meant to be seen as a better bet than the likes of Bob Holt OBE, who is known for MEARS group, where he listed on AIM in 1996 for around 11.75p, when he left in 2018 sp was 285p (was over 500p for a while in 2014 and 2017 - holders were paid a regular dividend too).
We have till Aug 7th latest till Boo could potentially vote their directors in under general meeting timeline rules and assuming Rev B stretch it out as long as possible.
Can't see why we would have not re-listed before then (or even by this month). Even if a raise was needed (which there is no evidence there is) just raise £20 million odd from debt and we can cover the RCF with the new debt and our current cash. Obv it would be on a bad interest rate but that's still a lot better than enabling a takeover at a low price.
Once re-listed management incentive shares - 3.4% dilution will kick in making it even harder for Boo to gain enough shares and that's still assuming both founders are on the same page and want to sell to Boo instead of letting their holdings re-rate on the market or buyout with Boo.
Oke even if Rev B did need a raise which we don't know, they would only need to raise around £20 million to cover the current debt, why not just raise more from debt? They had £80 million debt pre-IPO, now have £32 million. Even at a crazily high interest rate this would be better than a low ball takeover.
Also you can't assume both the former CEO and chair are on the same page with each other. The RNS today was only directed at Adam Minto, and the chair stayed a lot longer in his position helping the investigation etc than Minto did. Rev B only have 26.6% shares they would need both directors on their side at the very least.
From my calculation Rev B can delay any general meeting till Aug 7th latest (21 days after the meeting was asked for by Boo yest to organize a date, then has to be within 28 days of whenever the meeting date is announced - these 49 days would take us to Aug 7th).
I think Rev B can re-list before then, this will trigger the management incentive nil cost shares of 3.4% dilution which would make it even harder for Boohoo to gain enough shares.
You make a good point though Momajid, in terms of Bob Holt potentially trying to organize for other large buyers (maybe even for when it opens). Perhaps that was the point of the capital markets day, ensure there are other competing large buyers so it becomes too difficult for Boo to buy too many on open. Bob and co are happy with their 3.4% nil cost options.
Boo perhaps got wind of this and now trying to get rid of Bob?
Also on re-listing the management incentive shares kick in for Bob Holt and co, this would dilute us by 3.4%. So even more shares Boo would have to get on top of the 16.8% they would need to get to 75% with the holders (or slightly less as only need 75% of the vote).
Luckily due to the timing rules for general meetings as was the one asked for by Boohoo, Rev B could delay this vote till latest August 7th (by waiting 21 days from yest to announce the meeting and making the date of it 28 days after the announcement).
Plenty of time to re-list before then.
Can't see a sharp drop due to "uncertanty". The major fraud fears and threat of £0 has been taken away. They've also announced the expansion into Walmart post-suspension. Plus there has been major improvement in the macro in terms of inflation especially in the US where most of Rev Bs sales are. This is due to move up on open, there is a reason all the Rev B holders want it re-listed and all the Boohoo holders don't.
Only way Boo could buy more shares at a low price is if holders sell to them at a low price, Boo only bought low before because the largest holder Jupiter were mass offloading all their shares in various companies and are now completely out.