Member Info for Hosai

Cheshire, it sounds like they were still negotiating up until Thursday. Is also sounds like Apollo valued Ingenuity at a significant premium to pre-bid THG of 66p. If we call that 80p then it's pretty much impossible for the potential price Apollo were suggesting to not have been north of 200p when look at each divisions revs and ebitda and compare to peers. Unless you can explain to us your valuations of the divisions and why the figure would have been lower?

Therefore if anything the people who believed it would have to be circa £2.50 for any chance of deal (i.e getting big holders to sell) were correct (the loons as you call them), and the people who were sceptical that a large price premium would be possible were wrong. However for a sideways reason (issues of control) the deal has not happened.

So you can't really pat yourself on the back for being right and tell everyone else off for being wrong on believing in a high share price premium when the deal collapsed for a completely different reason (control issues not amount of premium on current share price).

also think some ppl have been mis-reading this part - "no ****! ingenuity is great. but neither apollo’s bid price, nor the structure proposed, are in the best interest of thg. myself, charles and the board, supported by>50% of shareholders, all agreed on that."

he doesn't say best interest of himself, he says, he, charles and the board decided it wasn't best for thg (obv we might disagree but that's a separate point).

as ceo and chair are the most important parts of the board i don't see it as a particular issue to emphasize these two positions and the board.

I just checked linked in post, it does now say "some of".

If it is the case that the large holders potentially rejected a very large premium from Apollo (which most of the signs point to being the case, especially if Apollo really did value ingenuity alone at a significant premium to pre-bid THG which was 66p) I do wonder why they wouldn't start buying up more shares at 63p?

If Sofina, Balteron and QIA start buying in earnest, with the low free float it wouldn't take much to get the price moving up to £1.50 - £2, a reverse of how easy it was for the sp to fall.

Perhaps they are maximized at how much they can put into certain stocks?

Overall there is a lot to be added to the 'outlook' once Rev B forecasts beyond Aug 2022 (assuming we don't quickly just get the actual results for FY2023 that ended Feb 28 2023).

Here are the recent launches:

1. Launch in 65 Primark stores from April 2023 (lets hope this increases) - https://www.dailyrecord.co.uk/lifestyle/fashion-beauty/primark-sends-beauty-fans-wild-29796258

2. New launch into 2,500 Walmart stores from April 2023 - Rev B president called it "a new relationship with Walmart". https://uk.fashionnetwork.com/news/Revolution-beauty-launches-at-walmart-in-us,1486156.html

3. Launches into 2,800 Walgreens stores from late May 2022 - Reb B said "expanding into more stores and bigger stands from July." Therefore this won't be in FY2022 results but will have 1-2 months in interim results - https://www.theretailbulletin.com/health-and-beauty/revolution-beauty-expands-into-select-walgreens-stores-and-online-19-05-2022/

4. Exclusive Ulta Beauty IRL range launch - Late July 2022 - Ulta Beauty is the largest beauty retailer in the US, Rev B launched there in 2019 but this was a new range. Won't be in FY2022 results, 1 month in interim results.

https://www.beautypackaging.com/issues/temp2022/view_breaking-news/makeup-revolution-introduces-new-irl-filter-foundation/

5. Launched in 300 Boots stores and online at end of Feb 2022 - This won't be in end of year FY2022 results but will be fully in interim.

https://www.boots-uk.com/newsroom/news/makeup-revolution-is-coming-to-boots/

This means in terms of the results we are waiting for, out of these 5 none will be in FY2022 results.

Interims will have -

Boots for full 6 months

1 month of Ulta Beauty IRL range

1-2 months of Wallgreens.

The outlook will be all of these three in full moving forward annualized, plus Primark and Walmart.

Even if they are loyal, if circa £2.50 has effectively been rejected and they have to watch their large holdings at 63p instead then that loyalty will get tested moving towards golden share expiry. Investors are loyal to growing their money as number 1 priority.

This is true Jon Taylor. Though I suppose Matt's M language will have been a bit off-putting, unless he is playing hard to get?

Times article did say this -

'It is understood that Moulding’s claims about Apollo’s valuation of Ingenuity have not been well-received in the City and that his assertion was being challenged in some quarters.

Apollo has declined to comment. The alternative asset manager rarely makes public statements about ongoing discussions with company boards.

Apollo’s team did, however, travel to THG’s headquarters in Manchester to progress takeover talks and the private equity investor said it was serious about its interest. Moulding said Apollo wanted him to keep running the business and that the firm offered existing shareholders stakes in the private company.'

I presume the times is talking in the past tense when it says Apollo was serious about its interest? The questionable part is the not making statements about "ongoing" discussions, but this could obv be a kind of error on the Times part.

Tbf Cong, I think it was a lot closer to a deal this time. Supposedly Apollo made an improved offer only 2 days ago. It does seem a shame Matt M had a few subtle and not so subtle digs at PE in his linkedin post as it makes it harder to now make it work with Apollo or other PE.

Lets hope he did have some kind of back up in mind. He writes in the same post "Yes, it’s unpleasant being listed in London." It's like he's shutting down all avenues. As Rock suggested maybe QIA is the back up plan.

I'm surprised had shares to sell considering you believe Matt M is a conman and every post you've written on THG has been bearish.

A part of me wonders, if Apollo really did want THG, they should go public with the price they offered. If it was circa 2.50 it would put pressure on Matt M and scupper his plan to take it for cheaper. If he then realized he couldn't take it it would make him more likely to negotiate on the controls aspect with Apollo?

Just to clarify this was the story in regards to Numis -

"A sales person at investment bank Numis fired off an incendiary email to clients last November. The message urged investors to sell shares in the troubled online beauty retailer THG, citing alleged “accounting irregularities”.

It is fair to assume the author failed to check the recipient list before hitting “send”. If they had done, they would have seen the name Iain McDonald, a board director at THG for 12 years.

Unsurprisingly, McDonald took umbrage at the email. Numis subsequently sent a corrected version, apologised and reported itself to the Financial Conduct Authority."

https://www.thetimes.co.uk/article/2bn-thg-bid-battle-tests-matt-mouldings-resolve-lwk9th69j

So it's fairly clear they self-reported after being caught.

It's quite long and mostly goes over old ground but hare are the 'new' parts -

'It is understood that Moulding’s claims about Apollo’s valuation of Ingenuity have not been well-received in the City and that his assertion was being challenged in some quarters.

Apollo has declined to comment. The alternative asset manager rarely makes public statements about ongoing discussions with company boards.

Apollo’s team did, however, travel to THG’s headquarters in Manchester to progress takeover talks and the private equity investor said it was serious about its interest. Moulding said Apollo wanted him to keep running the business and that the firm offered existing shareholders stakes in the private company.

However, Moulding complained yesterday that the bidders were “capitalising on a wildly low share price” and that the offer “wasn’t right for THG”.

Clive Black of Shore Capital said he was “amazed that Apollo had even looked at THG”. He said that although he is a “big fan” of entrepreneurship, it would “put everyone out of their misery if Moulding were to take it off the market”. Black added: “All the stuff about Ingenuity was ramped-up hyperbolic rhetoric that was above belief — it was nonsense and ended in tears.”

The "has not been received well in the city" seem rather vague. Do they just means that Clive Black doesn't agree with it? Also they claim Apollo can't comment because it doesn't tend to comment on "ongoing discussions". As far as we know discussions aren't ongoing so they should be able to comment, unless the times knows something we don't or has just made an error.

TBF to Manc, the chap at Hale Country club could still have been correct at the time, as it would appear talks were indeed still going on on Thurs, with Apollo coming up with an improved offer that day according to MM's post.

It does seem a bit frustrating, almost made worse that Matt M said Apollo valued ingenuity at a significant premium to pre-bid THG (66p). Presumably he was referring to whatever figure they upped the bid to yesterday.

This would surely mean around £1 for ingenuity. When you add all the other divisions it's difficult to see anything other than the fact that Apollo must have been putting out a giant premium to current sp (assuming ingenuity comment is true and Apollo didn't randomly massively undervalue nutrition/Beauty).

To me it's like Matt M is pretty much effectively saying we rejected circa £2.50. However we now sit at 63p.

Sort of agree it was a bit rude to Apollo in parts, however in that paragraph he was talking about the how the company has been valued over the last decade it didn't seem too wrong to me to mention Numis as they are probably in a sense the poster child of the 660p to 170p odd initial fall.

i sort of agree rock, inevitably the decision and linked in post must have been "rushed" or at-least not had much time to dwell on as it appears apollo were upping their bid only yesterday -

"yesterday apollo set out how they could raise their bid further, ahead of a deadline set by the takeover panel. their latest view on ingenuity had it as being significantly more valuable than the whole of thg the day before the bid leaked!

no ****! ingenuity is great. but neither apollo’s bid price, nor the structure proposed, are in the best interest of thg. myself, charles and the board, supported by>50% of shareholders, all agreed on that.

and so, the apollo bid was based upon smart financial engineering, capitalising on a wildly low share price from thg being on the lse. i get excited about building and growing things, not spreadsheets."

Manifesto Numis lied and were telling their clients THG had accounting irregularities, presumably go encourage them to sell. It was only exposed when an analyst there accidently had Iain Macdonald as one of the recipients in an emailed note he was sending, not realizing or remembering that Macdonald Is an NED at THG. Numis then self-reported themselves to FCA.

Does make you wonder could Apollo still try and bid again, it does seem they wanted THG clearly and there are ways around the 6 month wait as listed below?

Wood Group have rejected 4 of Apollos offers and Apollo keep coming back for more.

Today could have been a lot different if an effective price that had been rejected had been given. Apollo viewing ingenuity at a significant premium to 66p if true by Matt M indicates a huge premium for THG has effectively been rejected due to the structure and control aspects not working out. I'm hoping we hear more in the sunday papers.

Icouldntcomment, tbf the sp was between £6-£8 for a year post IPO. Many say that was overvalued looking back but it did stay there a year so it's not like the sp can't be "wrong" for long periods both up and down.