Retailer interest

THG boss says firm has rejected takeover offers

THG
THG has had a torrid time on the stock market

Matthew Moulding, chief executive of e-commerce retailer THG revealed the company has rejected a number of approaches in recent weeks.

Mr Moulding said each one had been unacceptable’ and confirmed that THG is not currently in receipt of any approaches.

His comments came as the company posted a £186 million loss before tax. Adjusted EBITDA came in at £161m for the year to the end of December, up from £150.8m the previous year.

The loss was principally driven by adjusted items, which include the excess costs for transportation, delivery and fulfilment costs in relation to Covid-19, alongside the commissioning of new warehouses and non-recurring acquisition fees.

The CEO said the company is planning to move to the main list on the LSE.

“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the LSE at the appropriate time,” he said.

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The shares closed at 15.08p (15.89%) higher at 109.82p but have fallen 85% over the past year. The company is now valued at about £1 billion, well down from its £5.4 billion valuation when it listed two years ago at 500p. Among the early investors was Sir Tom Hunter.

At a GQ event last year Mr Moulding hinted that he could take the business private.

Commenting on the latest figures, Russ Mould, investment director at AJ Bell, said: “Having joined the stock market amid significant hype about its future growth potential and then fallen flat on its face amid criticism around corporate governance, a lack of transparency and a squeeze on margins, one might wonder why THG has attracted takeover interest.

“While the company hasn’t disclosed who was behind recent approaches, one can only speculate it is private equity looking to sift through the bones of the company after its share price collapse. Even bad businesses might offer some value if you look hard enough.

“Chief executive Matthew Moulding has had many a cold shower since THG joined the stock market and he certainly isn’t going to let an asset stripper pick up the company on the cheap.

“Whether his idea of what the business is actually worth is reasonable or (more likely) in fantasy land, one cannot help feel that long-suffering shareholders might welcome a chance to get out now at a small premium to the market price so they can at least cut their losses and put the sorry episode behind them.

“The share price is trading 80% lower than its 500p IPO price in 2020, making it one of London’s worst stock market listings in recent years.

“As for the latest state of play, THG’s trading update contains more adjustments than a tailor’s shop.”



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