Member Info for Hosai

An lot of downgrades out of nowhere happening quickly after the bid interest. One a 57% cut from the target it gave 10 weeks ago. Seems a little...strange?

IMO there won't be many outside bidders because they know MM wouldn't sell for less than £6-7 so there's no point making a bid.
Think about it, MM/THG rejected PE bids of £3.9 billion (sp equivalent around £3.20) in 2018 when the company had made £736 million revenue a year and had £186 million in cash.
They now have made £2.2 billion revenue a year and have £530 million in cash.
This means they almost tripled the revenue since then. Even if you doubled the rejected PE offer instead of tripled like THG revenue and ignored the £344 million extra cash THG has compared to then you get to £6.40.
I know the £2.50 crowd say "2018 was a different time" etc but to me it is too stark to ignore. Inflation will be falling quickly next year.
The outside players may not want to work with Moulding etc in a buyout. Therefore IMO it's either stay public and separation etc, or a buyout with mostly inside players.

Sir Tom Hunter, Sir Terry Leahy, Lord Charles Allen, Richard Griffiths, Zillah Byng-Thorne...a lot of respected people invested in or working with THG.

It's funny reading the JD sports article about Peter Cowgill. He also held the joint CEO/chairman role for most of his time there but the media never cared the same way as MM.

p3 -

One Hyde Park turned out to be the last big project the brothers did together. Less than three years after the Holyoake case ended, Christian and his wife, Emily, moved their family to the Bahamas. Christian was said to be “sick of the UK”.

Nick Candy had sometimes dabbled in listed companies, trading shares in the property developer Minerva, which was taken over in 2011. In 2014, he turned his attention to the fashionable tech sector, investing in the podcasting platform Audioboom and joining the board as a non-executive the following year.

He also backed private tech start-ups. Candy Ventures was the biggest investor in Crowdmix, a music-based social network that went bust in 2016 after burning through £14 million of funding without even going live with its app. Crowdmix spent extravagantly on offices in London and Los Angeles — the one near Old Street featured a bespoke reception desk in the shape of a ghetto blaster. Staff partied in Amsterdam and Texas shortly before it struggled to pay their salaries. After Crowdmix fell into administration in July 2016, Candy bought it back.

Blippar followed a similar trajectory. Candy was the biggest shareholder in the augmented reality start-up, founded by the entrepreneur Ambarish Mitra, dubbed the real-life Slumdog Millionaire for his colourful — and sometimes exaggerated — backstory. At one point, Blippar claimed to have turned down a $1.5 billion buyout offer, giving it “unicorn” valuation status. But it too went bust, in December 2018.

Candy Ventures has had other mishaps, including an investment in the fashion brand Ralph & Russo, which again went under amid allegations of lavish spending by the founders. Candy Ventures says it is “a multi-stage investment firm backing outstanding entrepreneurs building transformational products”, and claims it has funded more than 25 businesses. But because it is based in Luxembourg, its financial firepower and performance are difficult to ascertain.

Few property industry insiders believe that Candy is a billionaire, as is sometimes claimed. He and Christian have not appeared in The Sunday Times Rich List since 2008; the compilers have not been comfortable that an accurate figure can be put on their wealth. Even Nick’s penthouse at One Hyde Park is carrying an £80 million mortgage. Candy has reportedly been trying to sell the property for £175 million.

In this context, his bids for Chelsea and THG appear far-fetched. Candy has disclosed that he has a £1.4 million stake in THG, meaning that he may benefit if Moulding’s empire is taken private by another suitor, a consortium led by the buyout firm Belerion Capital.

The disconnect between his ambitions and his circumstances has prompted eye-rolling, even among his friends. “Nick loves a PR opportunity,” said one. “For good, for bad, he doesn’t really care. But he hasn’t got the money.”

p2 -

His interest in Chelsea and THG suggests he wants to be seen in a more serious light. But Candy’s efforts are dogged by two questions. Having parted ways (in a business sense) from his brother Christian, does he have the brain power to compete at that level alone? And, more importantly, does he have the money?

One Hyde Park’s launch in 2011 marked the beginning of London’s post-crisis property boom in appropriate style. Five thousand gold balloons were released from the roof. Guests, including Bernie Ecclestone and Gary Lineker, nibbled canapés made by Heston Blumenthal, whose Dinner restaurant is part of the adjoining Mandarin Oriental hotel.

The Candys, blokeish public schoolboys from Surrey, had started out on their property careers with a £6,000 loan from their grandmother 16 years earlier. Now they wanted to redefine luxury real estate. With cash from Qatar’s then-foreign minister Hamad bin Jassim bin Jaber al-Thani (“HBJ”) and architecture from Graham Stirk of Rogers Stirk Harbour + Partners, they built three glass-and-steel towers opposite Harvey Nichols.

A month after the party, the The Sunday Times’ waspish restaurant critic AA Gill described it as “a hutch for the improbably rich ... the most pathetically unimaginative address in the city, a self-made ghetto of naff and gilt”. But Nick later claimed they sold £750 million worth of flats while it was still “a hole in the ground”. One alone went for a reported £140 million in 2014. The 86 units eventually raised a total of about £2 billion from buyers including Temur Akhmedov, son of the Russian oligarch Farkhad, and the Cypriot billionaire Polys Polys Haji-Ioannou, brother of the easyJet founder Stelios. It was not clear how the resulting profits were divided between the brothers and HBJ.

Christian, then a tax exile based in Monaco, handled the development and sale of properties through his Guernsey-based CPC Group. Nick, who stayed in the UK, was in charge of interior decor and project management. This arrangement meant that almost all the proceeds from One Hyde Park flowed offshore. It was questioned in a savage High Court clash between the Candys and a former business associate in 2017. Mark Holyoake alleged that Nick was, in effect, a 50 per cent owner of CPC and that this was “hidden for tax purposes”. He claimed that Nick’s £160 million two-floor penthouse at One Hyde Park and a 200-year-old, Grade II-listed mansion in Chelsea worth £85 million were secret dividends paid in return for his involvement with CPC. The Candys denied this; Nick said Christian had given him more than £250 million of assets out of “natural love and affection”.

Holyoake, who was suing over a £12 million loan the Candys had given him to develop a site in Victoria, lost the case. But the judge said that none of the protagonists emerged with much credit. “Each has been shown to have been willing to lie when they consider their commercial interests justify them doing so,” he said.

Mostly about Candy rather than thg but will post anyway:

The gym-loving founder of THG, formerly The Hut Group, will forever be associated with Instagram pictures of shirtless partying. The now-infamous snaps of Matt Moulding and his sculpted torso were taken on a yacht owned by Sir Tom Hunter, the Scottish retail tycoon who was an early backer of THG.

Hunter is tangentially involved in another incident that is shining a spotlight on the beauty and e-commerce group. Nick Candy, one half of the property duo that developed the luxury One Hyde Park residential scheme in Knightsbridge, popped up with a stock exchange statement this month saying he was considering a takeover bid for THG, which has a market value of £1.9 billion.

Candy, 49, and Hunter, 61, are good friends: they share an office near Grosvenor Square in Mayfair and form part of a social set that mixes in ritzy parts of London and the south of France.

That connection is the only thing about Candy’s interest in THG that makes sense. He has made a series of disastrous investments in tech start-ups but has no record of big acquisitions. Bankers doubt that his Candy Ventures vehicle, which is being advised by Bank of America Merrill Lynch, has the equity to pull off a move on anything near the scale of THG. “I get the impression he just wants to be seen to be doing very big corporate deals,” said one. “He’s just trying to up his profile.”

THG isn’t the first example. In October 2019, Candy Ventures, advised by Deutsche Bank, said out of the blue that it was considering a bid for the property company Capital & Counties, then valued at about £2.1 billion. It withdrew its interest less than a month later. And this March, claiming to have financing from South Korea, Candy made an attempt to buy Chelsea FC from the sanctioned oligarch Roman Abramovich. He said he had been going to Stamford Bridge since the age of four and boasted that “John Terry and Frank Lampard are friends of mine”. His Blue Football Consortium failed to make the shortlist of bidders drawn up by Abramovich’s advisers at Raine Group.

Candy, who is married to the former Neighbours actress Holly Valance, is known to be an Olympic-level name-dropper. He socialises with the comedians Jimmy Carr and David Walliams, and was photographed last month meeting Donald Trump in Florida. He bankrolled and promoted Shaun Bailey’s Tory London mayoral bid, which turned sour as Bailey was comfortably beaten by Labour’s Sadiq Khan last May — then was forced to resign as chairman of the London Assembly’s police and crime committee when a picture emerged showing him and Candy at a Covid lockdown-breaching party in December 2020.

He has dabbled in tech, putting money into Crowdmix, a music-streaming start-up, Blippar, a much-hyped augmented reality venture and Ralph & Russo, the couture brand that made the Duchess of Sussex’s wedding dress. All three went bust (Candy bought Crowdmix and Blippar out of administration).

In general I would agree Jmak but THG really has had disproportionate manipulation with Numis, telegraph and times etc.

Not really a relevant post to THG but Matt M posted this on instagram - https://www.instagram.com/p/CeBRKzXsALx/

Obviously it's the media so have to take with a grain of salt but didn't sound like this large shareholder was planning to roll over to private:

"One of THG’s biggest shareholders told The Times that he was “sitting tight” in the expectation of more bids and said that a 170p-a-share approach only valued the business at one times its sales. Recent private transactions for similar nutrition and health businesses, such as Nestlé’s acquisition of Orgain, were going for five times. “Our view is that THG is significantly undervalued,” the investor added. He noted that while THG’s shares had fallen dramatically since its listing in September 2020 other ecommerce stocks including Boohoo, Asos and Ocado had lost two-thirds of their value and he believed that THG had bigger future growth prospects."

https://www.thetimes.co.uk/article/thg-must-reject-bids-below-2bn-mxjvp0wv3

Goldman are you sure MM "and his mates" have enough support (75%) to go private? MM has only 14% voting rights. If not then they will have to convince some to sell their shares which means giving a higher offer.

Don't think it's new info Hooded, probably just standard when there is an RNS of an offer and they are late in putting it up.

Everyone needs to remember to put aside a bit for the collection for Bantham.

It's funny coz in September Barclays said THG Beauty "could be worth about £4 billion".

https://northernfinancialreview.com/2021/09/16/thg-confirms-beauty-spinoff-h1-revenue-tops-958m/

I think the general public own 11% of the shares.

Am I right they need 75% approval from shareholders to take private, and 90% to force people to sell shares? (i.e sell their shares in the private company).
To me people are a bit over-confident that MM would def have enough friends to buy it out at £2.50. MM owns 22% of the shares but only 14% of the voting rights. Not all the big/medium size holders will want to switch to going back private so soon and I also don't believe they would accept selling below £4.

Sorry just checked was wrong on 50%, 75% approval is needed in the vote for a takeover.

Although I just realized even though there would have to be a vote I guess they only need 50% to win the vote. Still doesn't seem completely obvious they would have enough? Moulding has 22% but his voting rights are only 14.9%.

In terms of the buyout theory, I believe retail hold around 11% of the shares and you need 90% of the vote to force through a deal? Therefore as far as I can see there would have to be a vote on an offer?
Also this is assuming all the big and medium sized holders are happy to go private. This would seem unlikely, there would surely be some who do not want to roll and go private but equally are not happy with £2.50 and would want £4-£5. This was even alluded to in the times article on Saturday:

"One of THG’s biggest shareholders told The Times that he was “sitting tight” in the expectation of more bids and said that a 170p-a-share approach only valued the business at one times its sales. Recent private transactions for similar nutrition and health businesses, such as Nestlé’s acquisition of Orgain, were going for five times. “Our view is that THG is significantly undervalued,” the investor added. He noted that while THG’s shares had fallen dramatically since its listing in September 2020 other ecommerce stocks including Boohoo, Asos and Ocado had lost two-thirds of their value and he believed that THG had bigger future growth prospects."

https://www.thetimes.co.uk/article/thg-must-reject-bids-below-2bn-mxjvp0wv3

I wonder if we going to discover there was a betaville rumour that he only posts publicly later..