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THG share price falls as it rejects takeover offers

·1-min read
THG sells supplements online through its nutrition business (THG plc)
THG sells supplements online through its nutrition business (THG plc)

Shares in e-commerce business THG fell almost a fifth (20%) in early trading this morning as the board of the business said it had rejected all approaches that have been been made by potential financial suitors as “unacceptable” offers that “significantly undervalued the company”.

The online beauty and wellness retailer indicated that it had received several takeover proposals in recent months from “numerous parties”.

Last month,  the Manchester-based business that owns brands including MyProtein and Cult Beauty rejected a non-binding £2.1 billion offer from a consortium led by Belerion Capital Group Limited and King Street Capital Management.

All recent approaches have been “unsolicited” the group said.

The business, formerly known as The Hut Group and founded by entrepreneur Matthew Moulding, said: “The board has not considered it appropriate to provide due diligence access to any of these parties. While THG is clearly aware of the macro-economic challenges, the company continues to perform well, and in line with its own expectations.”

In January, THG said margins for 2021 had fallen between 7.4% to 7.7%, compared to market expectations of 7.9%, sending the company’s share price falling. The company blamed the missed target on a hit from foreign exchange rates.

A few months later in April, THG said it predicted underlying profits for this year to be comparable with last year.

Potential bidders for the group have until 4pm on Thursday to make a formal offer for THG according to Takeover Panel rules.

In August last year, THG paid £275 million for Cult Beauty, which stocks 300 indie skincare and make-up brands including Molton Brown and Charlotte Tilbury.

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