Member Info for Okehurst1

I think we have to look at the ‘ other side of the trade ‘

PE are not VC’s

VC’s take huge bets and are ‘deep out the money ‘ they need
a 1 in 10 bets to come in but they don’t put the relative stake size as big as PE

PE are happy with 2X over 5 years, 20% return annualised
They place bigger stakes than VC but stuff can be measured

So Apollo / others will be looking at our £ EV and modelling with a 5 year view

You have to leave a bit on the table sometimes to get a deal over the line, £EV plus 10% and we are fully valued top end

£2 they nick a bit
£2.25 scratch
£2.50 we get a bit of bunce

That’s the range

Knowbody had £1.50 as the starter

Then we work up to £2 - Apollo Bid up Wood group 5 times it took till last week to secure

We know there are other bidders in the wings, will they Bid over £EV at £2.25?

£EV plus 10% is fair value for the 60%

Previous talks about potential offers for THG, from a range of parties, stalled over the last 18 months, but many analysts expect the company's board to recommend a deal - either with Apollo or another bidder - in the near term

City sources said Apollo Global Management was in detailed talks about an offer for the Manchester-based company that would be at a steep premium to its share price before the approach was disclosed but a huge discount to its 500p float price in 2020.

Knowbody,

Agree, enjoy that beer in the sun :-)

Agree on £3 …

To get this over the line smoothly it has to have a £2 in front of it, £2.25 gets us around £EV value
The 60% may want a premium to £2.50 but £2 looks highly likely

The FT had £3.7B Enterprise value, we sit at £1.45M EV today

We will ‘gap up ‘ as Apollo / others will have to pay to take control

This week the shorts take a beating

The CFO was a NED , there was a vacancy from January 2023

Would have taken months to negotiate this individual joining the BoD

The Company continues to function regardless 60% of the owners may be changing hands

Risk reward

We won’t fall to 50p as the players load up on stock, these guys have committed to this one

They then push to remove MM, decent chance he gets kicked off the BoD

The 60% push for changes / representation from the big boys

They enact their plan

Can only imagine the digging they will do on MM once they get behind the curtain, the £20M to him will be top of the list

MM needs this deal for so many reasons, he’s cornered himself

The Bid is coming, just have to have patience to see through to the end game to max the return

The £1 won’t get through, Baldertons would have to go with the offer, they don’t have flexibility due to their own LP’s
they are over their fund life cycle
You have to study the up to date /live registrar MM can’t make it otherwise Apollo would have already gone public

Apollo may have had £1.20 as their wish list but could now start at £1.50 ish and test the water and tease out counter offers

They Bid up 5X to secure Wood Group

I think Sparta / Kelso /BK are all waiting with others to
‘ join ‘ when the time is right - to back the highest bidder

Apollo put their first Bid, THG don’t have to accept straightaway there will be a time frame to respond

The 2nd bidder then makes their move within the time allocation, MM can keep his options open but still have his preferred bidder being Apollo

I wouldn’t be surprised MM has a post event agreement with Apollo to rip up the £560M Bond and refinance at say £140M
THG save a whopping £46M a year with the stroke of a pen

Funding Ingenuity then becomes standalone

It would be a really smart move - logical

Don’t forget we have other suitors in the wings, it’s not guaranteed Apollo get this to themselves

Thanks Pearl

Must be getting close to capitulation day for the Shorts

That will be fun

Good job we are not a small stock egh ?

Apollo know the business well , they like THG that much we have close to nil covenants

Says a lot

Guess we have to say why did they pick the timing when
they are in negotiations for a 3rd party to buy shares in THG and buying out up to maybe 60% of the shareholders ?

Think we all know what’s going on

Pearls, think Manc’s gist explains it well

Nb director ( not directors )

Suggest 2 parts to the BoD strategy

- New CFO clears the decks, usual kitchen sink stuff

- It suited MM to garner negative headlines of a £500M loss
and at the same time push the market away from the £70M FCF positive, then reiterate £135M intangible capex but don’t say in the RNS ‘ oh by the way we can turn that off overnight it’s SaaS not property ‘ that’s a key bit of data

It’s why we up 100% YTD, THG directors are loading up via Defacto controlled entities, multiple very smart / savvy investors have been building stakes up to the 2.99% threshold
they understand the balance sheet / assets / true cash flow possibilities

THG is going private - risk reward is in our favour

Pt 3

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

Let’s see how this post ages