Rivals weigh up takeover offer for Moulding’s THG
Shares in ecommerce group THG rose today on the back two potential bids for the company.
British property tycoon Nick Candy revealed last night that he is considering a takeover offer.
His declared interest after the market closed was immediately followed by a statement from THG that it had rejected a rival £2.12 billion approach at 170p per share from one of its shareholders and board members.
Shares rose 28.55p (24.52%) to close at 145p, but the price is still well short of its 170p offer. Russ Mould, investment director at AJ Bell, said this would suggest the market has little faith in the deal in that price range going through as THG does not want to be bought.
“Various parties have been sniffing around THG after its significant share price decline since joining the stock market in 2020 at 500p per share, wondering if there was any value at the now depressed price,” he said.
“The company has been a horror show of an investment, with concerns about corporate governance, a lack of detailed information about the business components and a realisation that its Ingenuity e-commerce solution wasn’t as special as the hype originally suggested, with plenty of other businesses offering similar services.”
Mr Candy, who had been among those seeking to buy Chelsea FC, said in his statement that his Candy Ventures vehicle was “in the very early stages of considering a possible offer” for the company which operates a number of websites selling beauty, skincare and health-food products direct to consumers.
Just minutes later THG, formerly The Hut Group, said it it had received a proposal from Belerion Capital Group and King Street Capital Management.
Responding to the Belerion offer, THG’s statement said that “its board, together with its financial and legal advisers, concluded that offer significantly undervalued the company and its future prospects and accordingly unanimously rejected the proposal.”
Mr Candy has some experience investing in technology companies. He built up a stake in podcasting platform Audioboom, which has been the subject of takeover speculation, as well as scooping up augmented reality startup Blippar after it went into administration.
Belerion is one of the Manchester-based firm’s early backers and is led by Iain McDonald, who has been a non-executive director of the company since 2010. King Street is an American investment firm with $20 billion of assets under management. Scottish entrepreneur Sir Tom Hunter was another early investor in the company.
Its shares have had a volatile few months since the company was floated by its founder, Matthew Moulding. They peaked close to 800p but plummeted on the back of concerns about its strategy and governance and suggestions by Mr Moulding that could take the business private.
SoftBank Group, a major investor, has yet to indicate if it will exercise an option to buy a 20% stake in THG’s Ingenuity platform.
Under UK takeover rules, potential bidders have until 16 June to make a firm offer for the business or walk away.