Member Info for Icouldntcomment

Big bagger,... Is that you Rodney?

SHORTS NOW AT 1.29%.

Insightful... no

Fair point Oxford. But there are many reasons the SP has been so low. Let's not go over again. But if the current SOP is 221, then why sell to a third party for less? This is why there has to be a Premium.

Rule 1 in Negotiation; only talk about your price never there's. And, I don't think Apollo will waste THG time with a rediculous low ball offer. They are too big for that and they will know clearly the future value of what they want to buy.

I read the messages on here most days and would like to add my two pence worth today.

First, I agree with whoever said the small free float price will not really decide the selling price. It is the big shareholders, BOD and II's who have to be persuaded, not us.
Secondly, let's step back here. Appollo approached THG not vice versa. THG is not a distressed, in administration or failing business. In fact, things are improving.
Which all means Appollo have to persuade others to sell, at a price, that allows Appollo to have a more profitable business and SOP'S 3-5 years from now.
I would really be surprised if the first published offer is less than 225. I would be further surprised if the final offer is less than 275.
So why is the current SP 100 and not 200. History! Who wants to get burned again like last year. There after all no guarantee of a sale.

Just marking time now waiting for a Buy RNS. As we get closer to the cut off day nerves are going to be tested.

When Apollo, or any other buyer looks into buying a business like THG, they may like to negotiate around Net Present Value (whether that is SOTP or EV) but what they are really interested in is Future Value. Their exit price.

So the question we should be looking at is, what will the SOTP be in 3-5 years time in Apollo hands through US options? What can they spin Nutrition or Beauty off for a few years from now. With their synergies and US knowledge they could advance Ingenuity a lot faster than a Manchester based HO can.

I won't give a figure to the above but to say £3.7bn is bloody cheap in relation to this future.

Good comment below. It's not just about SOTP's for Apollo, but also synergy with other investments. Makes any purchase around £3.7bn or just below (200-250) a pretty good buy for them.

In last 26 weeks, THG generated £70M FCF at group level
It has net debt of £180M with £40M of property disposals in the pipe

Nutrition will generate £675M 2023 @ 7.5% EBITA
Beauty. £1.3B. @ 6%

This after they have paid Ingenuity their fees - Ingenuity pay the rent on the buildings

With net debt of £140M their annual bond payment currently £60M a year will of course fall in line - they have £400M ish of cash on the other side of the balance sheet

So with no rent and let’s put 10% on £140M it’s £14M interest, the EBITA is net profit after debt ,they have £2B of tax losses made up of multiple lines
Cash is not an issue as a going concern, they have £580M on hand with an unused facility on top

The issue is funding the growth of Ingenuity, THG want to continue to grow this division and invest another £135M intangible capex in 2023 and same next 4 years
however on the analyst call and when pushed they said they could switch off this spend over night it’s pure SaaS based to grow Ingenuity

THG have just opened their 3rd USA fulfilment centre in March USA showed nearly 10% growth and that’s without this new unit , they have 16no worldwide total

The new USA centre in New Jersey can robo pick / package 540,000 orders a day, 30% of all orders globally are robo picked / packaged
This is where the cash has gone bar £1B on Beauty platforms/ manufacturing plants at the time of the IPO, they have built a global network

Re - production , they also purchased their own manufacturing plants, Nutrition produces in house 70% of all products it sells - and growing - Beauty is close to 20%

Why would USA PE want THG? And at what price
The FT have THG enterprise value at £3.7B vs £1.45 debt / Mcap

Take Apollo, they will look to fund Ingenuity and push as much of their other assets to use the Robo services
With Ingenuity funded the 2 Core businesses can invest in growing, both are currently number 1 in the world in size pure D2C Nutrition & Beauty

Even at £2 a share it’s decent punt for Apollo, the Banking /debt in place and manageable, cash is being generated and Ingenuity is a bet that Robo warehouses are better than blue collar humans

Share price is up 100% YTD - all about the entry point

THG will go private by the looks of things
£2 is under enterprise value and 40% plus of investors will roll their holdings

Nb it’s been a shocking investment for anyone who bought at the IPO but as we know investing is about timing

Morning all, I hold 300k at an average of 107.

Yes, it is on the LEX column. Not a good day for me. I think I'll stop posting today. Here is the summary.

"Throw in £500mn for its ecommerce technology and the enterprise value would shoot up to £3.7bn — more than double what it was on Monday morning."

I have the ft and I can't find this article

Ah. Thanks HH and SJ.

"It is expected that current shareholders will subscribe for the majority of the raise".

The above quote is in relation to My Protein going standalone.

Why would we be expected to subscribe. We already own it as shareholders of THG do we not. So, what would the "raise" actually be?

Rumour from where, I take it you are allowed to say? (wink, wink)

Apollo has $548bn assets under mgt. Buying THG is an easy deal.

Really, why are people selling. This is the real deal. Short term greed!!

And Hosai of course :)

Wow Canary, what a memory. Kudos. Or is that just Sunday afternoon wine for me.

"We note that Liberum, an independent broker, in their research note published in February 2023, estimated the "sum of the parts" to be 221 pence per share (actual price target was 55p) but highlighted that this valuation is only relevant if appropriate actions are taken by management and the board, a comment with which we agree".

But, we are all waiting on that 'appropriate action' are we not.

And I might add, Kelso just valued the Sum of the Parts at 221. That for me, and Kelso, is the starting point.

DIOR

Interesting that a lot of investors here have a average price of under £1 or even under 50p. My avarage is 107. Still low I think relative to the heady days of the IPO and immediately after. I'm sure a great deal of holdings are still over 400-500. Doesn't Terry Leahy still have about £67m at about IPO price.

Anyway, for this to be sold to anyone or a MBO, it really needs to be at a realistic price. Especially as 170 was derided so much.

So, I would agree with those that say any personal exit price as to be at a minimum of 250-300.