Member Info for Okehurst1

1P, you’re on the money, the refinancing is not complete as such, just can’t see any II’s making a move, MM is too sharp for them, they are useless, the BoD / Chair are in his pocket

Could we get a Bid ? Part or whole ? It’s doubtful with MM nicking 20% of the revenue ?

It’s game, set and match by the looks of things, best bet is a share buy back because it suits MM and then a private take out as Whey falls, MM converts his CN

DP,

GLA is a joke ( bad one )

Forgot to add

It suited MM to use Barclays , he knew the market news wouid leak and drive the share price down, the lower the better for him, so in affect for just £22M new cash THG market cap went down 20% but MM made money on paper as he is locked in at 32p, everything is gamed out by him

Us PI’s we are cannon fodder but even the II’s in THG are no match for MM he has made them look stupid, guess that’s why we have selling.

Dpw

He had to head off Ashley, he’s done that with a juicy low share price CN

Same with Auditors they are boxed off

Share buy backs next maybe, as tax efficient, why buy shares with his $$ when he get THG cash and reduce the float and get a bigger stake, save his cash to buy in the market when any II a wants out like SoftBank , plus he can always request a whitewash especially with the buyback

MM has gamed this out.

It’s what price can he get away with paying ?

OSG, as always well laid out factual post of events to date

Agree we are now moving into phase 3 of MM’s plan,

Ingenuity / balance sheet debt restructuring with extra control is now complete

It may have been the intention to use Selkirk / Iain Mc to demerge nutrition as an option last October but that’s gone in my opinion, the current m/cap has opened up a bigger prize, delist / take private THG

How does MM get there?

Unless THG gets a white knight bid the next few months then there is no stopping MM, he could buy disgruntled II shareholders stakes and head to 30% aided by a share buy back later in the year and make his move when he knows the free cash flow from THG can fund a part MBO, probably when Whey £drops

So unless a bid comes in and quick, it’s game, set and match to MM, he’s pretty much done over all his II’s, bagged 50% of ingenuity and he’s set up to take maybe up to 50% of THG converting the CN when the timing is right.

The Institutional investors only have themselves to blame by not replacing the Chairman, MM has made mugs of them, he’s laughing all the way to the Bank

We miss you Ste, come back

Morning Ste

Ste,

THG pays MM controlled Ingenuity 20% of its revenue.

We don’t really know if that’s a good deal or a bad deal ?

Without that 20% Ingenuity is arguably insolvent so it’s doubtful MM as CEO of THG will test the market or push Ingenuity for a price reduction ? He’s effectively blocked any plans Mike Ashley may have had, MM’s control is complete

It’s only the reduction of Sweet Whey that adds serious growth to the bottom line of Nutrition

Share buy backs are the only mechanism to drive THG share price higher or MM / cronies make a move on the rump they don’t own with a buyout, however that’s structured

Sweet Whey makes up 67% of the gross cost for MP

The futures price is moving in the right direction … down

Assume MM is correct a 25% drop from highs generates an extra £40M of cash, that’s bunce for another day

Whilst we await the above to feed into real time prices ,debt sorted till 2029, FCF +, THG is looking cheap

THG didn’t need the capital which was ‘ only ‘ £31M, don’t forget they didn’t get £91M as such, the MM cash is just to pay down debt on one side but it created a creditor (MM ) on the other

It allowed THG to negotiate better terms with its banks etc

saved on its interest bill, maybe covenants reduced

It’s got a load of cash on the balance sheet to do £25M to £40M …. Maybe £31M

Ste , with respect, you answered your own question

1P, I think it was the right deal for the Company, I agree with your sentiment

I do think MM has played his hand brilliantly

Next move a share buyback

If us little PI’s can see a share buyback suits MM then he will seriously considering.

MM hates the Shorts and he secures the 250 status which I guess he likes, I think his family held 14% before this week he is now sitting at nearly double that at the conversion rate if he ever needed to convert

A share buyback is tax neutral for him, costs him nothing really

So from last October he’s nicked 50% of Ingenuity and on paper he’s heading to 30% THG via a CN, the buyback is just bunce on top

Sit tight await the buyback

Us little PI’s have to try and 2nd guess MM’s next move

This weeks financial restructuring was a logical move by MM, that’s done and dusted now, many of us on here said it was the next event after Ftse250 inclusion ,with a long shot from Selkirk, think the latter is now a non Runner

What’s MM’s next move ?

He’s now got the free cash on the balance sheet if his covenants allow to conduct a share buyback, £25M to £40M and it’s job done, he gets an easier ride at the AGM, the Good Lord can say it’s all part of the master plan

MM also now has his near £60M of the extra shares fixed at 32p

Next move to deter Ashley / force him to pay more and drive the share price higher

It’s been a ruthless execution strategy to control Ingenuity, secure the annual £400M from THG , square the debt till 2029 , the buy back closes the short / medium term risk and pushes the share price up but it doesn’t cost MM anymore ££ to increase his stake and the buyback improves his percentage

We may not like it but it’s genius

Looking through the lens of MM

He had to head off Ashley, it’s check mate on that one.

Ashley may still add but he will know MM will have the option to convert his CN

Same time it made sense to restructure the balance sheet, THG just didn’t need all the cash sitting there doing nothing, he now has a clear run to 2029, Insurance agencies get comfortable / ditto auditors, debt question gone away.

Share buyback makes sense at these levels, market likes it, extra pressure on Ashley, he hurts the shorts, could he announce before AGM ? Maybe? Would make it a smoother ride ?

Ingenuity protected by default, the 20% gravy train from THG

keeps rolling

MM has headed off Ashley, he had to do something and he did it, debt sorted

THG has given guidance for 2025 last night so we are not getting any nasties in a few weeks time

Price of whey drops 25% it’s £40M extra cash

Laid out nice OSG

Few thoughts

Wonder which II’s joined in the trade last Friday thinking they were on the money with their insider trading by Shorting / dumping stock and now have a problem ?

Did Ashley pick up the opposite side of their trade and we a have TR1 due ?

Ditto FTSE 250 funds who didn’t buy in yesterday as they may have heard in advance ?

Plus all the Shorts in general

Set up nice for a short squeeze

Carefree, save going back and forth ,it’s worth getting hold of the Jeffries report that was recently published re THG, all gets explained, it’s a heavy document but an interesting read which lead to a number of Brokers upgrading their forecasts

You had to be a client / or pay for it but maybe it’s posted on line for free ?

Yup well put Pearls

Fair doo’s to MM it’s a nice bit of financial engineering and he free’s up the £FCF to do buybacks or dividends.

Hi Carefree

Checkout the Demerger Doc, THG quote £77M FCF this year which was before this financial restructuring, they included annual capital repayments which had been running at £20M + p/a , ditto included net interest paid, they mentioned capex down to £20M on a separate line, I’ve removed this £20M from the £77M but I could be wrong

If you add back the capital repayment and reduced debt it look like maybe £40M of extra cash so closing in on £100M

THG have also confirmed £120M + EBITDA last night so if we use the above it looks like maybe £80M + true free cash

all depends at what point they book Capex

Hope that makes sense