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Autostore capital markets day at THG was well timed for interested parties to come and have a look at Ingenuity in action.

If you look at timing of Crane appointment, they probably started on this even earlier than summer, but new Ingenuity CEO needed to start and bed in.

Anyway, fun and games ahead. Until further official news or leaks, SP could literally go anywhere and probably not up! I don’t think we will be waiting long for leaks.

THG is trading like a distressed share, but they have plenty of time to get something done. Will it be the demerger, or will it flush out suitors for other divisions or the whole?

What a circus but what fun!

MM is deep down a good and capable guy, but his approach doesn’t work in a plc environment managing a delicate message.

As starfighter points out, a tighter script was required rather than rambling about advent calendars.

Where we differ in opinion though is that I don’t believe the Ingenuity demerger is a half baked idea. Looks like they have been working on it since Crane came in. Let’s see if they can execute/fund it. If not the Apollo type deal is back in play, because it looks like not all of the 65% want to roll and fund ingenuity

@oohaahcantona knows his onions, the best summary I have seen on what to expect here

“Call and timings17 Sep 2024 11:18

On de-merger I agree that it seems they are a lot longer down the road on this and will probably launch back mid to back end of Oct and start 1 Jan clean.

Defo seems they have some existing and new equity investors into Ingenuity, plus will most likely raise a 3-5 yr convertible bond for say £200/£250m and a working cap revolver. It may be some equity holders may also participate in convertible bond if the have that appetite if they go down that route - maybe Moulding may take a slice for yield and avoiding dilution if things go wrong.

As for valuation, this will get leaked pre circular in case anyone who is not part of the process wants to take a large minority stake for a higher amount…today was just advertising more broadly that Ingenuity in play for those not in the know….“

Are they planning the Ingenuity de- merger for 1st Jan? If so we shouldn’t have to wait long for the circular/more news.

From the investor call transcript:

“ahead of a circular, it's probably safe to assume for -- and this is public information, as I'm told as well, within quite a few analyst reports, but we'd anticipate about GBP150 million worth of cash outflow in Ingenuity, to the point at which it turns free cash flow positive, which is about 3 years out. …..So, if you think from the 1st of January, it's probably, 3 years, GBP150 million of outflow. So that's probably the most pertinent number, I think, to be able to give to you”

Somethings got to happen sam69…status quo is over.

I’m really not convinced MM can get Ingenuity away stand-alone, but the BoD must have some confidence to put it out there.

I’m not sure we can talk about the 65% anymore, as clearly not all aligned

MM can’t buy shares with this demerger stuff going on

It was a new position:

I used to think Chair came in to baby sit after Vivek exit to until new CEO came in, plus leverage his Rolodex to support sales

Now I am thinking it was more choreographed, putting in place a PE back-able Board for Ingenuity as a stand-alone entity. Both Chair and CEO have been through PE cycles/exits before so for this brief.

Careful Matt, you’ll be accused of ramping.

Sounded to me like the shareholder group are pushing this. Not sure inaction is an option this time.

Struggling to get my head around this Ingenuity demerger.

THG plc remaining (Nutrition & Beauty) have zero value if Ingenuity fails, and vice-versa. It is a symbiotic relationship.

Interesting that the Board think Ingenuity is bank fundable/sellable as a stand alone unit. Until Monday, I always thought it lacked sufficient scale, and was too reliant on Nutrition/Beauty, and needed 2-3 more years to diversify the enterprise customer base.

The BoD must have tested bank and investor appetite, otherwise they wouldn’t have stuck their neck out and gone public IMO.

One thing I noted on the call, MM has stopped referring to Ingenuity as a “tech” asset, and now is referring to it as an “infrastructure” play.

Haha I did notice that new software, how are your multi ID’s going neutral very transparent and honest character Steve Scott? Is it a headache for you and that is why you are a grey this morning. Bless

I know Oxford. “Neutral Steve” is usually his friendly persona, imagine what we are in for when he logs in as Bad cop personas Polishcap or APH. Maybe that’s why he is angry, got his log ins mixed up?

What’s worrying Steve, you really are being aggressive this morning.

I am just a shareholder Steve, and transparent about that.

You say you are neutral 🤥

I don’t buy into your doom, and will correct what I see as factual incorrect statements by you, of which there are many

Get out of bed the wrong side did we Steve?

Trading wasn’t great that is true. But this is an M&A share now. It’s all in the transaction, timing, value.

As you know well, “neutral Steve” who only posts FUD and lies 🤥

Oh yes Steve, btw the way, the PE backable NED Chair for Ingenuity was brought into THG in Jan/Feb, so they have been working on this for 9 months. Tax clearances are done. FTSE for March, which means deal done by Xmas? They are well on with it

It’s my opinion “neutral Steve”..

I don’t think they would have gone out there so “public” on a wing or a prayer without an interested party , and he said some but all not stakeholders were supportive.

The sense I got from the call was that they were well on with the demerger, he just didn’t want to share for confidentiality reasons. Also got the sense that at least of one of the “stakeholders” was lined up for it, which I expect to be QIA given there deep pockets and ability to take a longer term “infrastructure” horizon. The “for sale” sign should flush out other interest though. It’s going to be an interesting few months

Valuation from Apollo was more than the share price at the time of the indicative offer - which was 60p at the time.