Member Info for ViciousHippo

If Ingenuity has no value at all, or has negative value, then you are definitely better off opting for Remainco shares in full. That way you get roughly 15% more Remainco shares AND the share price might be rerated.

Well many seem to think Ingenuity has no value at all, which if true, means you get an immediate £100m uplift in the value of THG shares.

On the other hand, if the £100m valuation is too low, then you're better off getting as many Ingenuity shares as possible.

So it all depends on the correctness of that £100m valuation of Ingenuity.

Jed - yes that is my understanding. So agreed - our shareholding value does not drop even if the shares do, because we will own more shares (either in THG or in Ingenuity, depending what we opt for)

OhhAhh - I dont recal that there will be fewer shares in issue. I have understood that that will not change.

The overall shareholding you have will not go down because of the demerger - as you will benefit from owning shares in Ingenuity or having a greater allocation in THG, but as I said, mathematically speaking the shares in THG should go down by £100m of value demerged. If you think the opposite will happen, it suggests that the £100m is vastly wrong and actually Ingenuity has a negative value.

From a pure mathematical point of view the demerger should cause the share price to go down, as £100m of value is being taken out of the THG shares. For now there is full value in the shares, but the day after the demerger the value will disappear into a new set of shares.

I wish you luck wild tiger, but there are many stocks out there which are safer bets and offer bigger returns. Just look at the likes of Nvidia, Palantir, Sofi, PayPal, crowdstrike, Fortinet etc etc. The list goes on...

The issue with THG is that it has de facto turned into a turnaround company. That is not something that attracts big investors like funds. It is also disappointing that a company that goes to IPO is actually an immediate turnaround company. That's not how IPOs should work. The whole thing has been handled badly, and missold

LD - There is no "offer". It is a demerger, and you are getting an allocation based on relative valuations between Remainco and Ingenuity. If the Ingenuity valuation was higher, you'd simply get more Ingenuity shares, but fewer Remainco shares.

Traintracks - i believe that is correct.

Mathematically a demerger should have no iimpact on the shareholders. Practically it may of course.

The placing is a dilution, but it also introduces new capital into the business. You lose some percent ownership, but the business has new cash. Theoretically the two are zero loss, althogh the placement price may change that formula.

On the demerger, you should end up with the same value, but in two pots - one Beauty/Nutrition, the other Ingenuity.

Ingenuity will not be listed so you cant trade the shares. In theory a share in Ingenuity still has its value, in practice you have no way as a minority shareholder to stop any dilution and as it is private there is no regulation. You have to trust the directors and other big shareholders. If you think they will play fair and Ingenuity will one day grow into a fine tech success story it may be a good investment.

If you prefer to stick with the Beauty/ Nutrition only, you should get compensated in the demerger with a bigger shareholding in that. Bear in mind though, that in theory you are no better off. The value of B/N should be less due to the loss of Ingenuity. The share price of B/N alone may therefore be less, although you will have more shares. In theory you end up in the same position as currently. The hope is of course, sentiment will be different, and B/N will be valued more positively.

Placements tend to be below the market price, in order to incentivise the new investors. Otherwise they can just by the shares on the stock exchange, right.

To summarise:

Placing is in current THG. Nothing to do with the demerger specifically, although connected

Price = market price at close of business at whatever date they said

Demerger = you get shares in both Beauty/Nutrition (remains listed as THG) and an unlisted company that contains Igenuity business

You can choose not to take part in Ingenuity and you will get more shares in Beauty/Nutrition

The real debate is whether to take the Ingenuity shares, or get more Beauty/Nutrition instead. Ingenuity is being valued at £100m. Cant trade the shares, so the question is - is that a good deal or not, worth having shares that cant be traded, instead of having more tradeable Beauty/Nutrition shares.

You should definitely ask him that on X.

Could be listed in the future. Depends if you believe in Ingenuity long term

@steve - they always said it was a demerger, not a sale. A demerger is not a disposal. It's a split of a group of companies

Following the Demerger, IngenuityCo will operate as a separate, standalone entity without recourse to RemainCo. IngenuityCo would be expected to remain a private company with no public listing

There is no mention of an Ingenuity IPO. It will be unlisted

@jedclampit

Each THG shareholder will be given a choice (i) to elect to continue to be invested in IngenuityCo and RemainCo in the same proportion that their shareholding in THG represents, (ii) to apply to receive more or less than their pro rata entitlement of IngenuityCo shares, or (iii) not to receive any IngenuityCo shares.