BlackRock, the second-largest shareholder in troubled Manchester e-commerce, beauty and nutrition giant THG plc, is selling nearly half its stake in the company at a 10% discount, Reuters reported.
The move is the latest sign of investor concern over transparency and governance at the Manchester firm.
Reuters reported that deal bookrunner Goldman Sachs said on Tuesday that BlackRock would sell 58 million THG shares at £1.95 per share, a 10.3% discount to Monday’s closing price and well below its initial public offering price of £5.
BlackRock and THG declined to comment.
THG went public at £5 a share in September 2020 and the stock rose to almost £8.
However, it has now fallen to around £2.03.
BlackRock had a 10.13% stake of nearly 124 million shares in THG as of mid-October, according to Refinitiv data, making the US asset manager THG’s biggest institutional shareholder and the second-biggest after THG founder and CEO Matthew Moulding.
“For a while THG was a stock market darling with investors clambering to own the stock in the belief it would play a key role in helping product manufacturers sell direct to consumers. Now it is losing fans at an incredibly rapid rate,” said Russ Mould, Investment Director at AJ Bell.
“The shares peaked at nearly 800p at the start of the year, and today they briefly traded below 200p amid chatter that BlackRock is trying to dump a block of shares.
“Asset managers rarely sell after a stock has already fallen so much unless they’ve lost all confidence in the business and/or found something that completely changes the investment case.
“The backlash against THG seems to centre on the fact that people bought into the hype without paying attention to valuation.
“Now that difficult questions are being asked about costs and more, particularly if the business is broken up into three as per the suggestion from THG, investors aren’t getting the answers they want – or they are not liking what they see.”