Ann: hummgroup 3Q22 business update, page-35

You'll notice NGE Capital has exited this trade.

The problem is:
1. HUM shareholders will receive 150m shares of LFS and many will want to sell day 1.
2. LFS is illiquid and on ave. has 1m of shares trade a day, this means LFS share price will get slammed and there's little valuation support for LFS.
3. LFS is a low qualiity fintech/BNPL co. that's got NTA of 50c, so is trading at close to 4xtangible book. The big banks trade at 1.5xNTA. This should trade at 1xNTA or below....so even at $1/s it's not cheap.
4. HUM is left with a consumer finance business that has averaged 20m of NPAT over the last few years. You shouldn't value a finance business on NPAT multiples, it's very easy to lend money and grow NPAT, it's also very easy for poorly underwritten loan books to blow up. Additionally, not the right credit environment for these types of companies.

I haven't settled on what consumer finance business is worth but at today's price HUM is not nearly cheap enough for this to be a sensible trade.