THG presidents should count the blessings of life as a publicly traded company


middleatt Molding and the THG board did an easy job last week. They rejected a “very preliminary” takeover offer from a consortium led by one of the online retailer’s non-executive directors. It would have been a simple decision as it would be humiliating to roll over at 170p per share (£2.1b). Even some bearish bearers who were obsessed with THG at a time when the share price was above 600p thought that the fair value of this bewildering group would be at the 175p level.

But what happens to Molding if the city comes out with serious bids that some define as 250p per share? While such a plot seems unlikely (as the current stock price suggests on p.139), in reality, I’m assuming he’ll be tempted by the idea of ​​going private. Speaking of “options” in an infamous interview with GQ magazine last year, he said London listings were “irritating from start to finish.”

If so, the molding should remember that the grass isn’t always greener elsewhere. If his personal path was to go public in the US, he should note that the US market he envied has since devalued almost all “unprofitable” tech stocks.

Second, all things considered, the London reveal wasn’t all that terrible for THG. When the company went public in 2020, it had raised £920 million of new stock and raised an additional £800m through the acquisition of SoftBank and investment firm Sofina exactly a year ago. In other words, the open market has established him as a resource to prove that there is genuine long-term business within THG.

Third, a return to private property may not be a picnic, either, if he doesn’t like the evil short selling found on the public market. Yes, THG lived in that private equity world before floating at 500p, but that was an era of cheap cash and a strong desire to invest. Short-term demands from life and individual investors continued.

Plastic surgery should count his blessings. Life in the stock market is tough, but he has tremendous freedom to manage his business as he pleases. Private options can load another layer of uncertainty on the company.

A home improvement chain cleans the house.

Depending on how you look at the Q1 numbers, B&Q owner Kingfisher’s power drill either blinks or works great. Welcome to the Investor’s Difficulty: How to Assess the Current Strength of Consumer Demand as Covid Trading Terms Distort Comparisons.

For example, B&Q itself’s sales were down 18% over the same period a year ago. The telecommuting factor makes me feel a lot, even when I remember the spooky sounds of that month. B&Q’s similar earnings, on the other hand, were 16% better than their last quarter before Corona, so perhaps there has been some fundamental progress.

Kingfisher CEO Thierry Garnier did his best to encourage a playful interpretation by explaining that demand is “elastic” and that inflation and supply chain pressures are being “effectively” managed. More importantly, he is sticking to his previous earnings forecast of £770m for this year and put a £300m buyback into the mix for a good measure. A positive turnaround from two French companies, Castorama and Brico Dépôt, is clearly helping.

But the stock has fallen by a third since earlier this year, anticipating the day when cost of living pressures will hit sales of kitchens and bathrooms. At that point we’ll be talking again about how Kingfisher is a “big box” retailer in the digital age.

It will take at least six months before we get a clearer picture. But you can already say this. Because Garnier overturned his predecessor’s obsession with centralization, the group has market share in most regions and appears to be a more agile beast. The Kingfisher can’t ignore the storm of DIY land, but appears to be a net winner in the plague.

Publishing your pay percentage doesn’t close the pay gap.

Sadly, the disclosure of the FTSE 350’s CEO-employee pay ratio, as demanded by the Theresa May government, was not accompanied by an obligation to shame the board. All you need is a self-explanatory “narrative”. So it’s no surprise that the high-wage center predicts that the pay gap will widen this year.

However, consultant Paul Lee of Redington suggests that more information be disclosed. Large corporations should refer to the percentage of the UK workforce that earns a “real living wage” set by the Living Wage Foundation. Good idea: League tables get noticed and can be more disconcerting.

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