CAS Investment Partners Releases Presentation Detailing its Valuation Analysis and Opposition to At Home’s Sale to Hellman & Friedman

Rhea-AI Summary

CAS Investment Partners, owning approximately 17% of At Home Group (NYSE: HOME), challenged the $37 per share acquisition offer from Hellman & Friedman. The firm argues that the intrinsic value of At Home exceeds $70 per share, advocating for a higher valuation based on recent earnings and future growth potential. CAS claims the current offer is inadequate, citing flaws in the Special Committee's assessment and urging shareholders to reconsider tendering their shares. They emphasize At Home's strong performance and significant opportunities in home décor.

Positive

• CAS believes At Home's intrinsic value exceeds $70 per share.
• Recent earnings indicate a strong standalone future for At Home.
• Projected margin expansion above historical levels supports a higher valuation.
• At Home's own comparable companies suggest stronger valuation metrics.

Negative

• Hellman & Friedman's offer is seen as significantly undervaluing At Home.
• The Special Committee's failure to recognize positive earnings momentum.
• Assumptions of margin degradation below 2019 levels are criticized.
• Concerns over inadequate sales process and lack of strategic alternatives review.

CAS Investment Partners, LLC (together with its affiliates, “CAS” or “we”), which beneficially owns approximately 17% of the outstanding common stock of At Home Group Inc. (NYSE: HOME) (“At Home” or the “Company”), today released a presentation detailing its analysis and views regarding the insufficient $37 per share offer made by funds advised by Hellman & Friedman LLC (collectively, “H&F”) to acquire the Company. The presentation can be downloaded at www.ProtectAtHome.com.

CAS became At Home’s largest stockholder because we believe the Company is a winning retailer with clear momentum, a considerable growth runway and significant margin expansion opportunities. Our analysis shows that At Home has the potential to produce tremendous value for stockholders in the public market.

To help investors better understand our view that the intrinsic value of At Home is more than $70 per share – meaningfully more than H&F’s inadequate tender offer – our presentation lays out the transaction’s numerous issues and details our response to each flawed point:

ISSUES WITH AT HOME / H&F TRANSACTION TERMS	CAS RESPONSE
The Special Committee wrote off positive earnings momentum	At Home’s recent earnings signal a bright standalone future
The Special Committee assumes catastrophic margin degradation below 2019 levels	Our projections provide a demonstrable bridge to margin expansion above historical levels
Goldman Sachs’ DCF analysis is flawed	Basic, supportable adjustments imply a far higher valuation
Comps previously cited by At Home are conspicuously absent from proxy and cherry-picked “precedent” comps are low growth, mature concepts	At Home’s own comps suggest a higher valuation based on EBITDA and earnings multiples
At Home’s claims of running a thorough sales process ring hollow	Mr. Bird spent years engaging with H&F – and stands to make $100+ million while maintaining upside
The Board failed to run a comprehensive review of strategic alternatives	Standalone path and leveraged recapitalization present superior opportunity

We encourage stockholders to closely review our analysis and suggest that before deciding to tender your shares, you ask yourself one simple question:

Does this transaction provide fair consideration for the Company’s strong track record of tangible business improvements, material progress throughout the pandemic and distinct competitive advantage in the expanding home décor category?

CAS believes the answer is “no,” which is why we will not tender into this grossly flawed sale.

www.ProtectAtHome.com

About CAS Investment Partners, LLC

CAS Investment Partners, LLC is a value-focused investment management firm with offices in New York City and Connecticut. The firm was founded in 2012 by Clifford A. Sosin.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210624005579/en/

FAQ

What is CAS Investment Partners' stance on the H&F acquisition offer for At Home (HOME)?

CAS Investment Partners opposes the $37 per share offer from Hellman & Friedman, asserting that At Home's intrinsic value is over $70 per share.

Why does CAS Investment Partners believe At Home is undervalued?

CAS cites strong recent earnings, a favorable growth runway, and significant margin expansion potential, suggesting the current offer does not reflect At Home's true value.

What are the key issues with the H&F acquisition terms according to CAS?

CAS points out flaws in the Special Committee's analysis, including assumptions of margin degradation and selective use of comparable companies.

How much of At Home's stock does CAS Investment Partners own?

CAS Investment Partners beneficially owns approximately 17% of At Home Group's outstanding common stock.

What should At Home shareholders consider before tendering their shares to H&F?

CAS advises shareholders to evaluate whether the H&F transaction offers fair consideration given At Home's strong track record and competitive advantages.