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THG Rejects Another Takeover Offer

Published May 13, 2023
Published May 13, 2023

The latest takeover attempt of struggling UK online retailer THG has failed, sending shares plummeting after news surfaced that talks with Apollo Global Management ended without a deal. THG shares fell as much as 23% before paring back in early trading after a bump on news of Apollo's interest last month.

THG said after a “short period of discussion” and giving Apollo the chance to up its offer for the company, its board has unanimously decided to “terminate all discussions."

The statement continued, "It has become clear to the board, supported by shareholders representing a majority of THG’s issued share capital, that there is no longer any merit in continuing to engage with Apollo. Consideration and rejection of the indicative proposal has been on a basis consistent with all previous offers for the company, some a matter of public record, which were also rejected based upon inadequate valuations and the nature of those offer structures.”

THG was founded in 2004 by Chief Executive Matthew Moulding and CFO John Gallemore, retails more than 8,000 brands, and operates more than 160 localized websites across 35 languages and 42 currencies. THG has become one of Europe's largest online retailers of premium beauty brands. Other holdings include Eyeko, Illamasqua, ESPA, SkinStore, RY, Glossybox,, Grow Gorgeous, Ameliorate, Acheson & Acheson, Christophe Robin, Perricone MD, Dermstore, and Cult Beauty.

THG's 2022 full-year preliminary results and operating losses have more than doubled to £495.6 million ($616.4 million), but profitability improved in the first quarter of 2023 despite an 8% fall in sales.

The group floated with great fanfare on the London Stock Exchange in 2022 at an opening valuation of about £5.4 billion ($7 billion), the biggest debut by a market cap since Royal Mail in 2013. At its peak in early 2021, the business was valued at £10 billion ($12.4 billion). Its market value before the confirmation of Apollo's approach was around £925 million ($1.1 billion). The Manchester-based group has been plagued by setbacks and a tumbling share price that has lost nearly 70% of its value this year and fallen almost 80% since its IPO.

Last summer, a consortium consisting of Belerion Capital and King Street Capital Management and property billionaire Nick Candy expressed interest in buying THG but ultimately walked away.

Co-founder and Chief Executive Officer Matthew Moulding took to LinkedIn to control the spin on the latest takeover bid: 

"Just about every major PE firm has enquired about taking THG private. Usually, nobody finds out. But if there’s a leak, then the Takeover Panel forces an announcement. This is what happened with Apollo.

"PE interest isn’t surprising. For the three years before IPO, THG shares traded at £3. Having doubled in size we then listed THG at £5 a share in Sep 20. They rose to £8 in the first-year post IPO but, after the Numis led short attacks when they weren’t made a Broker to THG, shares fell to as low as 30p in late 2022.

"The last time THG shares traded at 30p was in 2009, when the Group had £80m Sales and only sold CDs! Today THG is 28 x bigger (and we haven’t sold CDs for years).

"PE firms usually want majority ownership. We’ve been clear: don’t bid if you want 51%, plan to use debt to leverage up, or won’t allow existing shareholders to stay invested. This rebuffs most PE firms.

"c65% of THG shares sit with me and several long-term shareholders. Our LSE pain comes from the 35% of 'fast money' shares actively trading. I’ve personally spent £39MM since IPO, increasing my stake and reducing THG shares on the market. The most recent being £5MM at 39p in late 2022.

"It’s well known that PE deals are lucrative for Management. THG would be worth billions more away from the daily market manipulation involving Bankers, Hedge Funds and Pundits."
By Matthew Moulding, Co-founder + Chief Executive Officer, THG

"Yes, it’s unpleasant being listed in London. But I’ve spent 20 years building THG, from an idea while sat on my sofa, into a global Group with Sales of £2.2bn. We’ve just completed a vast expansion of our Tech and global infrastructure. We’re just getting going.

"It’s well known that PE deals are lucrative for Management. THG would be worth billions more away from the daily market manipulation involving Bankers, Hedge Funds and Pundits. PE typically gives Management 10% of the company as an incentive, with 5% to the CEO. These incentives are worth hundreds of millions to staff. PE can be compelling.

"Like with all previous bidders, the Apollo bid wasn’t right for THG. Yes, it allowed existing shareholders to stay invested, with me continuing to run the Group. But Apollo also wanted PE controls, particularly across Beauty & Nutrition where they asked for controlling equity rights. 

"Like all previous bidders, Apollo were told their bid valuation and structure was unacceptable. Yesterday Apollo set out how they could raise their bid further, ahead of a deadline set by the Takeover Panel. Their latest view on Ingenuity had it as being significantly more valuable than the whole of THG the day before the bid leaked.

"No shit! Ingenuity is great. But neither Apollo’s bid price, nor the structure proposed, are in the best interest of THG. Myself, Charles and the Board, supported by >50% of shareholders, all agreed on that. And so, the Apollo bid was based upon smart financial engineering, capitalizing on a wildly low share price from THG being on the LSE. I get excited about building and growing things, not spreadsheets."

Entrepreneur Nick Candy last year walked away from making an offer for THG, as did a rival consortium consisting of Belerion Capital and King Street Capital Management. At the time people with knowledge of those bids said Manchester-based THG did not engage with either party or grant any due diligence access over concerns about the levels of debt in both proposals.

THG said in a statement that the board remains fully confident in the company’s strategic direction and long-term prospects as an independent business. It added that the profitability and cash-flow improvements made during the first quarter of 2023 are continuing and it’s progressing with “diversity objectives” to strengthen the board.

Charles Allen, the Chair of THG, added, “THG’s board, in accordance with its fiduciary obligations and as demonstrated with its recent engagement with Apollo, will always give due consideration to all potential options which provide the opportunity to maximize value to THG’s shareholders."


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