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THG share price slumps after turning down takeover bids

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Troubled THG runs beauty and nutrition websites including Lookfantastic, Cult Beauty and Myprotein. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty
Troubled THG runs beauty and nutrition websites including Lookfantastic, Cult Beauty and Myprotein. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty

The share price for THG (THG.L) tumbled on Thursday after the embattled e-commerce company announced it had rebuffed all recent takeover proposals.

The Manchester-based business, formerly known as The Hut Group, said it had not opened its books to any of the suitors, adding the bids "significantly undervalued" the company.

"All recent approaches for THG have been unsolicited and, in the unanimous opinion of the board, were unacceptable and significantly undervalued the company," a company statement said. "After consulting with THG’s major shareholders and taking advice from the company’s advisers, the board has not considered it appropriate to provide due diligence access to any of these parties."

The e-commerce group, which runs beauty and nutrition websites including Lookfantastic, Cult Beauty and Myprotein, rejected a £2.1bn approach from a consortium led by Belerion Capital Group and King Street Capital Management in May.

However, Belerion has pulled back from the table, saying it does not plan to make an offer.

Shares fell more than 16% in early trade on Thursday in London.

It was revealed last month that property tycoon Nick Candy was among the other parties interested in a deal.

Potential bidders have until 4pm on Thursday to make a formal bid or walk away under UK takeover rules.

Read more: FTSE 100: SoftBank plots additional London listing for Arm

The group added that it was "clearly aware" of wider economic challenges, but insisted it continued to trade well and in line with its expectations.

In April, the company reported revenues grew by 16% to £520m in the first three months of this year, following a 35% rise in revenues to £2.2bn, helping push adjusted earnings up 7% at £161m.

It's the latest twist in the saga for THG, which has seen its share price plummet since floating in 2020 amid concerns about corporate governance and the company's growth prospects.

THG, which has faced criticism over its governance structure and future prospects saw more than £2bn knocked off its stock market value last year.

The firm floated at 500p in September 2020, and shares peaked at 837p in September 2021. They were at 80p in early March and stood at 104p prior to Thursday's announcements.

However, the company's boss and founder Matthew Moulding said in November that he regretted listing the company, fuelling speculation of a takeover bid to take it private again.

Watch: What are SPACs?

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