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THG rejects all ‘unacceptable’ buyout bids, investment firms exit takeover race

By Huw Hughes

Jun 16, 2022

Management

Image: THG founder and CEO Matthew Moulding

The Hut Group (THG) said Thursday it has rejected all recent takeover bids for the company as they “significantly undervalued” the business.

In May, THG revealed it had turned down a 2 billion pound joint takeover bid from investment companies Belerion Capital Group Limited and King Street Capital Management.

On the same day, the group announced that investment firm Candy Ventures, controlled by property tycoon Nick Candy, was in the “very early stages of considering” a takeover of the business.

But on Thursday, the company said all recent offers “were unacceptable and significantly undervalued the company”, and therefore it “has not considered it appropriate to provide due diligence access to any of these parties”.

It said “the board has determined that it is not appropriate to seek an extension to the deadline set out in the company’s announcement dated May 19 2022”.

Also on Thursday, Belerion Capital Group Limited announced it had stepped out of the takeover race, together with King Street Capital Management.

THG share price falls

Shares of THG were down more than 20 percent on Thursday after being lifted in recent weeks by takeover speculation.

THG, which owns a portfolio of online fashion, beauty, and wellness brands, has grown rapidly over the past few years as it profited from consumers’ shift to online channels.

In its preliminary annual results for the year to December 31 2021, the group reported revenue of 2.18 billion pounds, representing a 35 percent increase year-over-year and a 91 percent increase year-over-two-years.

In the same period, the group made an adjusted EBITDA of 161.3 million pounds, up from 150.8 million pounds a year earlier.

But THG also warned in April it expects cost inflation to impact its full-year profit. The group expects FY22 adjusted EBITDA to be broadly in line with the 161 million pounds it posted for FY 2021.

Its profit outlook, combined with concerns over the group’s corporate governance, have resulted in its share price plummeting over 80 percent in the past year.

In March, the company hired former ITV CEO Charles Allen as its new chair after founder and CEO Moulding said he would no longer serve as chair in a movie to reassure investors.

The Hut Group
THG