British e-commerce group THG, previously known as The Hut Group, has ended its agreement with Softbank due to "challenging market conditions" and had been "terminated by mutual agreement among the parties with immediate effect."
Softbank first became an investor in THG last year when the company announced it was raising $1 billion in fresh capital to fuel growth. SB Management (SBM), a subsidiary of SoftBank Group, invested $730 million in a deal that included an option to invest an additional $1.6 billion within 15 months to take a near 20% stake in the tech arm THG Ingenuity. The deal would have put a $6.2 billion valuation on that division alone, which at the time contributed less than 1% of THG's turnover.
THG said it has completed the internal separation of its key divisions as previously announced, simplifying the corporate divisional structure providing "material optionality and flexibility to enter into future strategic partnerships to generate value accretion." However, the call option with SoftBank to inject a further $1.6 billion into its online retail services division THG Ingenuity will also not go ahead.
Last month, Belerion Capital Group and property billionaire Nick Candy expressed interest in buying THG but ultimately walked away from making formal bids. THG acknowledged receiving proposals but said that all recent approaches have been unsolicited and significantly undervalued the company.
The Manchester-based group has been plagued by setbacks and tumbling share price for the last 18 months. THG shares have lost nearly 70% of their value this year and fallen almost 90% since it floated on the London Stock Exchange in September 2020. Softbank continues to own a 6.5% stake in the tech firm.
The Hut Group (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, Lookfantastic.com, Grow Gorgeous, Ameliorate, Acheson & Acheson, Christophe Robin, Perricone MD, Dermstore, and Cult Beauty.
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