THG shares plummet again after retailer rebuffs takeover bids

THG shares plummet again after retailer rebuffs takeover bids – with time running out for new offers

  • Belerion Capital and King Street Capital made a £2bn offer for THG last month 
  • THG markets beauty and fitness and runs the e-commerce platform Ingenuity
  • THG shares have plunged by 83 per cent since floating in September 2020

Bosses at THG have rejected all recent takeover proposals, claiming they were ‘unacceptable and significantly undervalued the company’.

Belerion Capital Group and King Street Capital made an offer worth £2billion for the consumer goods seller last month, while an investment vehicle controlled by property tycoon Nick Candy had also mulled an approach.

Potential suitors of THG, which sells beauty and fitness and runs the e-commerce platform Ingenuity, now have until 4pm today to make a firm offer or walk away.

Deadline: THG, which sells beauty and fitness and runs the e-commerce platform Ingenuity, had given its potential suitors until 5pm today to declare whether they would make a firm offer

But, following discussions with shareholders and business advisors, THG told investors that it had rejected all takeover bids and would not be providing due diligence access to prospective parties.

The announcement sent THG shares tumbling by another 19.3 per cent to 84.6p in early trading, meaning their value has plunged by 83 per cent since floating on the London Stock Exchange in September 2020.

Chief executive and co-founder Matthew Moulding has previously said he regretted listing the company, once remarking in a GQ magazine interview that the experience had ‘just sucked from start to finish.’

THG began to see its share price slide last Autumn after major shareholders like Goldman Sachs and The Capital Group sold large chunks of their stakes when the firm revealed plans to delist its beauty division.

That came alongside the group reporting weaker-than-expected numbers in its half-year results amid a general downturn in online retail caused partly by the loosening of Covid-19 restrictions.

Then, in the following month, THG held a disastrous capital markets day, where analysts accused the firm’s management of failing to address their concerns, leading to THG shares plummeting by 35 per cent in one day.

Much of the concerns derived from Moulding holding both the chief executive and chairmanship role, and his possession of a ‘golden share,’ which gave him the power to block any takeover attempts for the company.

To try and assuage shareholder anxieties, the Burnley-born billionaire agreed to scrap the special share arrangement and stood down as chairman, with former ITV boss Sir Charles Allan succeeding him.

Yet the Manchester-based firm has continued to be dogged by conflict of interest accusations among investors, many of whom are concerned that Iain McDonald, the founder of Belerion Capital, is also a non-executive director of THG.

Just before the company’s annual general meeting last week, board member Dominic Murphy, who has faced questions over his relationship with Moulding, quit his post after eight years.

On top of all this, the group has warned that underlying profits for 2022 are set to be in line with last year’s figures because of soaring raw material and energy costs.