Shares fly for THG as bidding war pushes online retailer’s value to £1.8bn
Shares in the online retailer THG surge as much 25 per cent this afternoon as investors back the bidding war taking hold of the ecommerce firm.
The online health and beauty retailer said that it had batted away a £2.07bn bid from two investment companies, Belerion Capital and King Street Capital Management last night. It also revealed that it had received two other approaches.
“The board of THG notes the recent press speculation and confirms that it received a third unsolicited, highly preliminary and indicative non-binding proposal of 170 pence per share,” the company said.
“The board of THG considered the proposal, together with its financial and legal advisers, and concluded that it significantly undervalued the company and its future prospects, and accordingly unanimously rejected the proposal.”
The value of the online health and beauty retailer, formerly known as Hut Group, is currently £1.8bn, and it is understood that property businessman Nick Candy is tempted to make an offer for the group.
THG runs websites including Lookfantastic and Myprotein, and in a trading statement last month CEO Matthew Moulding said the retailer was readying itself to “step up” to the premium segment of the London Stock Exchange “at the appropriate time”.
In full year results for 2021, THG posted record full year revenue at £2.2bn and adjusted EBITDA performance at £161m.
Boss Moulding said the retailer had surpassed targets set when the firm went public a year ago and the size of the business had effectively doubled in two years.
On rapid inflation, THG said it would aim to reduce the impact of price rises on consumers by “maximising efficiencies in our operating model, absorbing some of the pricing pressures, and raising prices at a lower rate to underlying input costs.”
Guidance remained unchanged, despite cautions that consumer spending could be subdued by pressures on household budgets. However, the retailer pointed to a one per cent revenue hit from the conflict between Russia and Ukraine.
Shares are up 24 per cent on Friday afternoon, with price down thirty per cent year to date.