Member Info for Hosai

I don't think even that would be enough JG.

Their holdings at IPO were £78.3 million each and now at 19p they must be around £9.3 mllion each.

If Boo were to offer them £56 million each it would be equivalent to their rev B shares if sp got back to 115p a share.

This may not even be enough as the founders I believe would imagine their holdings getting back to IPO eventually and may not even be that bullish on boohoo overall. Then consider their attachment to Rev B and things like the Walmart launch and Rev Bs amazing growth in quarter 1.

However lets say they did accept, boo would have to dilute by £112 million for the two founders. This would dilute boo at current market cap by 26.4%.

They would still then only own 58% of Rev B. Plus the founders would have significant influence at boo owning 13.2% each and would likely be on the boo board of directors due to their holdings. This would seem a slight governance nightmare for Boo with Mintos recent actions?

Equally they could pay in cash but then they'd be eating into their RCF loan which is their only real cash, it may not even be allowed?

Agree JG not only Minto but they'd need to pay off the former rev b chairman as-well via cash or boo share for his lost Rev B holding. They'd need to pay them a very large figure imo to compensate for parting with losing the likely strong re-rate on their shares.

Plus Boos own £15 million stake wouldn't reach the potential it would have.

Also no-one would trust boo anymore as they apparently doubled crossed Bob Holt so how can you believe any assurance they gave you in future corporate negotiations.

They'd then have control but would be working with the guy (Minto) who stepped down for fraudulent activities. Doesn't exactly look great for boo governance.

This is the link from the 20% equity raise part - https://www.pinsentmasons.com/out-law/analysis/freedom-non-pre-emptive-uk-share-issues

I've been thinking more on Rev B defenses if we are in a situation where boo continue to want to go hostile and still have support going into early august as a worst case scenario.

Could Bob not kind of...break/bend the rules a bit around equity raises? The current company rules from IPO as far as I know were only valid for 15 months after IPO, so expired in December 2022.

From what I understand, in terms of non-premptive shares (shares that can go to one party instead of to all shareholders in proportion to their holdings) the IPO rules had the standard guidance of up to 5% equity raise allowable for any purpose and 5% for an acquisition. It's not clear if the nil cost management incentive 3.4% dilution proposed on re-listing is part of or bound by these rules.

Technically speaking Rev B could make a small acquisition by early Aug costing a few million and dilute by 5%? With the other 5% could dilute by 10%. This still wouldn't be enough to block if both founders are with boo but would be if only one of them was.

However either way this standard has expired. Since this has happened the standard rules have increased -

"The PEG’s 2015 principles restricted companies to seeking authorities of no more than 5% of their issued ordinary share capital (ISC) for general purposes, and a further 5% of ISC to be used in connection with an acquisition or specified capital investment. Those figures have now both been raised to 10%. In addition, companies can expect shareholder support for additional amounts of ‘2% + 2%’ respectively to be used for the purposes of making a follow-on offer to retail shareholders.

The ability to issue up to 20% of ISC for any purpose was approved temporarily by the PEG during the initial stages of the Covid-19 pandemic, subject to many of the same conditions set out in the revised statement of principles. That this was generally perceived to have been successfully implemented by companies has led to the increase in the limits on a permanent basis."

Considering there is no current agreement due to expired AGM which is due to shares being suspended for 10 months for fraudulent actions, could Bob not just go with the 20% dilution? He could make an argument that this is now the standard therefore this is the only thing management have to by in this unusual situation.

He could also argue that it was feared the previous CEO (who had to step down for fraudulent activities) was going to gain control again and this would put shareholders at further risk. Therefore the raise with an external party was done to protect shareholders interests. This would technically be true.

Only boohoo would complain and sue (literally suing on the basis that they were prevented from working with someone who stepped down due to fraudulent activity in order to force shareholders to sell their shares far lower than they wanted - I'm sure the judge would sympathize).

Minto might also sue but would be being sued himself.

The 60% is crazy though, how can they be forecasting "high single digit revenue growth for the year" when at the time of the forecast they have known q1 growth was around 60% yoy?

Boohoo FY23: Revenue drops 9%

Rev B FY23: Low single digit revenue growth

Boohoo FY24 Revenue forecast: Flat to down another 5%

Rev B FY24 Quarter 1 - Sales up 60% yoy

Boohoo to Rev B: "You know, we can help you with your growth problem".

I guess prob you are right PhatJ, also wouldn't they have updated by now such a large error if it was?

However they must have already mostly known these results when doing the interim results so why did they forecast only high single digit revenue growth when they had just finished a quarter March - May when they had had 60% revenue growth? (interims were released 2nd June). Seems incredibly prudent?

That's great growth though, thinking about it not out of line with peers - Warpaint growth up 45% yoy in the 5 months to Mar 31st and ELF Beauty up 78% yoy in the 3 months to March 31st.

Interesting to note Rev B likely now likely matching warpaint's ebitda forecast for this year based on these results but also at around 2.5 times warpaints revenue. Warpaint valued at around £210 million so Rev B has to get to 68p to match warpaint (should be higher than them).

Obv don't need to go over the ELF comparable again but is very favourable to Rev B

Are we assuming the sales up 60% was an error? Maybe was 6%? Otherwise doesn't quite tally with high single digit growth for the year.

You never know AJC but you'd think boo would have to offer them a large amount (they shares are down from 160p). I'd imagine the founders would be believing their shares could do well just left on their own, especially with the walmart launch. Minto still liking rev B posts on linkedin, you'd think he's still attached to the company after founding and being part of it so long.

Boo would then have control at 58% though still not enough to force a takeover as would need 75% of votes cast. But would have control so could do stuff to probably eventually force some kind of takeover. Hopefully by that point sp would have recovered a lot more.

At-least the "cusp" of shares trading again line was reiterated but no specific mention this time of the boo aspect frustrating that process.

Lol Hereshopin, I'm not against Boo overall, I actually have some boohoo shares.

However if you can lose out as a shareholder when your company is doing well then there's almost not much point in being in the stock market. I of course understand the risk of investing and paying the price if your company then does badly but if it does well and a shareholder loses out then it's a bit crazy. People invested in Rev B took the risk that things wouldn't be as bad as they feared from the issues given pre-suspension. In the end things have arguably turned out not as bad as perhaps feared so to not be rewarded for taking the risk would be obv be very frustrating.

If boo are aiming for genuine growth and synergies etc I don't have so much of a problem.

Great rns today...boo still have the potential to gain management control but I think the doom scenario of them purposively destroying it from the inside to buy it low will have become a lot harder legally and reputationally when it's clear Rev B is on the up with Bob Holt et al.

I mean if such a shareholder robbery from majority investors against the under 50% could be done to a company like Rev B who are performing well and have a promising future then it could surely happen to any company, including boohoo themselves (Mike Ashley could take control with others theoretically, apparently anything goes nowadays?), especially considering boohoo are performing worse than Rev B in terms of revenue growth and margin.

Momajid my point was if the over 50% holders of boohoo wanted to take it over, and rob it from the minority holders they could do so (coz apparently the FCA doesn't care about these things?), the same way boo are hoping boo robs Rev B. Or maybe its not so simple to do that as the boo forum seem to believe?

Just coz boo makes more revenue wouldn't help it in the scenario of a majority board finding a way to buy it out for as cheap as possible.

I can't give you that calculation but could try work it out, all I know is Rev B had £21m net debt in July 2022 and have £18 million now so it doesn't seem to have been a problem for the last year. They operated with £80 million debt before going public.

I prob do need to chill momajid...though I wouldn't argue that Boo having access to more debt is the most impressive thing to shout about.

Rev B have £18 million net debt (£14 million cash, £32 million debt), Boohoo have £5.9 million net cash, hardly that much difference.

Warpaint only have £7.5 million cash. Maybe someone should try and rob their shareholders too.

Technically speaking Mike Ashley and Kamani and a few others could agree to "take control" of boohoo (once they make up more than 50%), vote in a frasers board, make some purposively bad decisions, get the share price down and then offer the under 50% share holders a pittance.

Kamani would be given Frasers shares. The majority shareholders could rob the shareholders the under 50%.

That's pretty the scenario we are discussing for Rev B. Why couldn't it happen for any company including boohoo? Boohoo have worse revenue growth prospects this year than Rev B and both companies predicting EBITDA margin around 4%.

Deathshares the phrases such as immiment seemed more saying where it would be without boos management change rns.

"Derek Zissman - " Boohoo's actions are a clear attempt to destabilise the business at a crucial juncture in its recovery. This will only serve to delay further the lifting of the suspension of trading in Revolution Beauty's shares."

What would have been interesting to know is why the boo aspect is stopping it from being un-suspended which they don't detail.

Maybe we shouldn't annoy him, might still be able to persuade him away from boo if that's what he's thinking!

Who knows who to trust

He's still clearly attached to Rev B...I can't see him selling his stake at 19p to boo when it is down from 160p. Not also with news such as the launch into Walmart. If I was him I would do nothing, wait for years then start slowly selling the odd shares when needed, by then people will have moved on so to speak.

Meanwhile if boo team up with him in order to have control then Boo will need to be working with Minto from now on, and Minto has obv just had step down due to the fraudulent issues. Personally I don't think it was a "terrible fraud" (as frauds go), for example the revenues aspect was £9 million out of £185 million odd genuine revenues.

Overall he still deserves credit for building a huge brand and business. However clearly he did have to go and I struggle to see how boo can gain control with him and work with him if he's literally just stepped down for all these issues.

However if they don't offer him some kind of position and pay him handsomely via boo shares (if he is to sacrifice his Rev B holding in an intentional low takeover scenario then he'll want payment for it) then I don't see why he would sell to them either.

Neither option makes sense to me, the best would be to do nothing.

Not that it means much but Minto is still quite active on linked in, liking or "loving" most rev B posts.

https://www.linkedin.com/in/adam-minto-5ba08b25/recent-activity/

His title on there is still - "Founder & CEO at REVOLUTION BEAUTY"

Stlll even if boos intentions are pure...a full replacement of the board is rather...full on? Would it not have been enough to have say one exec on the board with firm agreements on further synergies etc.