Member Info for Hosai

I should have said "potential" bid.

Just to remind what Kelso posted recently -

"Whether or not Apollo ends up bidding for THG, we’ll all have to wait and see, but given Kelso's view of the strategic value of both THG’s nutrition and beauty businesses, as per the previous RNS of 21 April 2023, the board of Kelso would be very surprised if there were not multiple potential parties assessing THG as a whole or in part. Under UK Takeover rules, if there are no longer talks with Apollo then we understand that there has to be an announcement to the market immediately. If there are new multiple approaches for all or part of THG we would not necessarily expect to be formally informed."

Do wonder if Kelso might know anything...Jon Goold was once joint broker for Boohoo with Phil Noblet, Noblet is head of investment banking at Jefferies for UK/Ireland and is dealing with the current bid from Apollo according to the "response to speculation" rns (he also dealt with Candy/Belerion so doesn't necc mean much) however I'd imagined he must know Jon Goold.

Do sometimes notice that Noblet 'likes' pretty much every THG post on his linkedin, only other posts he 'likes' are jefferies ones and ones from his wife - https://www.linkedin.com/in/philip-noblet-5b254333/recent-activity/

Jeff THG still had overall revenue growth in FY2022 and even with the shutting down some loss-making aspects was still forecasting some small overall revenue growth for FY2023.

Nutrition grew from the previous quarter and was likely also making better margin.

"Our focused approach to enhancing profitability has led us to de-emphasise certain geographies where we are unable to benefit from the economies of scale associated with our local distribution hubs. Consequently, our headline rate of growth in THG Beauty should be viewed in the context of improved profit margins."

We've still had no rns saying the talks are off, making it questionable that the two bid drop days were in fact based on knowledge of the potential deal?

Since then today we've just had a 1.41% drop on a day where asos/boohoo went down 23%/12.8% respecively.

Stockbroker if you think we'll be back in 40s on no deal then you must think potential takeover news is currently giving thg an almost 100% premium (and 200% premium when it was 117p a week ago). This would mean the market is taking the takeover very seriously.

I'd say it's more likely no deal takes us back to the 60s however the golden share expiring in 4 months will give a buffer plus our results were better than ASOS as THG didn't have falling revenue and made some EBITDA (ASOS had negative EBITDA).

The further fall in US inflation must surely be making acquisitions look more appealing...the discount factor will be reduced in their analysis.

Comes out at 13:30...think the market will respond well, energy prices have tanked, this has to keep weighing downward on inflation.

Could add to comparison that Warpaint has 37k instagram followers. Whereas Rev B have 3.5 million instagram followers. Often notice that Rev B seems to have great engagement in their social media posts in terms of comments etc from followers/customers.

" There's zero chance that Apollo would offer 200p for THG. If MM wants to get the price up there, he's got to deliver".

How do you define deliver? Fever tree is valued at £1.67 billion with revenues of £344 million and £39.7 million EBITDA.

THG is valued at around £1.2 billion and Nutrition alone (which is bigger brand than Fever tree) has revenues of £675 million and £51.8 million EBITDA.

It's also better set up in terms of investment with 2 large fully automated warehouses etc.

You then have to add Beauty, Ingenuity and tax losses to valuation.

Therefore I question how much it's a matter of "delivering" versus THG going private and eventually re-listing all or parts in the US.

There is a potential bid coming within a week Jeff and Matt Ms golden share expires in 4 months or so, I would say this might be making investors more talkative than normal?

It could equally be a case of some sold initially because of a dubious bloomberg headline, and then following that people sold because the share price was down (on a day where most other sector stocks were down another 6%), hence they believed no bid.

Some of the selling will have been people selling because they believe the price action indicates no deal, as clearly some here believed (rightly or wrongly).

Difference between this and last time with bids is last time as the share fell each day the press was constantly putting out articles casting doubt on the bids from Belerion and potential Candy bid.

This time it's mostly been positive media (mainly from sky). The only negative was an article that was an opinion piece by Bloomberg which gave THG a 200p valuation but said they imagined it might be hard to get the two sides to agree. However they appeared to have no knowledge of the deal but gave a (probably deliberately) negative headline that made it look like they had knowledge on the deal.

Other than that we still don't know anything and don't have the constant media articles casing doubts on their being a deal as there was last time in the bid period.

They already an investigation by forensic accountants that took 3.5 months and found nothing too damning (though obviously not great things).

Are you suggesting with these "rumours" that BDO, who seem to be struggling to complete many audits recently, found something they didn't?

It's crazy, THG struggling to cling to just over £1 billion market cap, meanwhile the market has no problem with Fever tree being at £1.67 billion despite it having less revenue and EBITDA than THG Nutrition.

Any problems with the deal would be between large investors not folding in with the bidder who are not happy with the price and Apollo not happy with paying that much, so it's not to do with what Matt M would accept.

Jeff you thought MM was going to accept to sell his shares at 130 - 150p share, after saying £1.70 significantly undervalued it less than a year ago and after having had a year to sell them between £5.50-£8 from Sept 20 - Sept 21 and him not selling any?

I think the confusion comes as sometimes non voting shares MM has aren't included which makes me wonder if yahoo might be correct

Is the Yahoo market cap correct at £1.53 billion or google at £1.14?

Maybe THG just moving with market today, Boohoo/Ocado down 6%/5%