THG shares fall 20% as potential bidders walk away

THG CEO Matthew Moulding

Shares of Manchester-based THG fell about 20% on Thursday after two potential bidders for the e-commerce, beauty and nutrition giant walked away and THG said it had rejected all recent takeover approaches as undervalued.

Belerion Capital, a shareholder in THG, along with King Street Capital Management, announced they do not intend to make an offer — and Candy Ventures, an investment group controlled by property tycoon Nick Candy, also said it has no plans to bid.

THG went public at £5 a share in September 2020 and the stock rose to around £8.

However, THG shares have since fallen to around 84p  — giving the firm a stock market value of just over £1 billion — following a disastrous presentation to investors last October and concerns over the company’s structure, transparency and governance.

THG said on May 19 it rejected a takeover proposal of £1.70 per share worth £2.07 billion from Belerion Capital Group Limited and King Street Capital Management.

In a stock exchange statement on Thursday, THG said: “… THG has received indicative proposals from numerous parties in recent months.

“Furthermore, as announced on 19 May 2022, an indicative non-binding proposal from a consortium led by Belerion Capital Group Limited and King Street Capital Management, L.P., had been rejected by the board of THG.

“All recent approaches for THG have been unsolicited, and in the unanimous opinion of the board, were unacceptable and significantly undervalued the company.

“After consulting with THG’s major shareholders and taking advice from the company’s advisors, the board has not considered it appropriate to provide due diligence access to any of these parties.

“In accordance with Rule 2.6(c) of the Code, the board has determined that it is not appropriate to seek an extension to the deadline set out in the company’s announcement dated 19 May 2022.

“While THG is clearly aware of the macro-economic challenges, the company continues to perform well, and in line with its own expectations.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.