THG plc, the Manchester e-commerce, beauty and nutrition giant, announced it has terminated its “option and collaboration agreement” with a unit of Japan’s SoftBank Group “in light of global macroeconomic conditions.”
SoftBank, which became a major investor in THG last year, had the right to exercise an option to buy a 20% stake in THG’s Ingenuity business.
THG also said it has completed the internal separation of its key trading divisions, which “simplifies THG’s corporate divisional structures and provides it with material optionality and flexibility to enter into future strategic partnerships to generate value accretion for its stakeholders.”
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 70p — giving the firm a stock market value of roughly £880 million — following a disastrous presentation to investors last October and concerns over the company’s structure, transparency and governance.
In June this year THG shares fell after two potential bidders for the firm 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 did not intend to make an offer — and Candy Ventures, an investment group controlled by property tycoon Nick Candy, also said it had no plans to bid.
On Tuesday, THG said in a stock exchange statement: “THG PLC announces that it has completed the internal separation of its key trading divisions which, as previously announced, simplifies THG’s corporate divisional structures and provides it with material optionality and flexibility to enter into future strategic partnerships to generate value accretion for its stakeholders.
“Further to the announcement on 10 May 2021 that THG had entered into an option and collaboration agreement (the “O&C Agreement”) with SB Management Limited (SBM), a wholly owned subsidiary of SoftBank Group Corp, THG also announces that in light of global macroeconomic conditions the O&C Agreement has been terminated by mutual agreement among the parties with immediate effect.
“The call option granted by THG to SBM will not therefore be, and will cease to be capable of being, exercised.”