SoftBank Group Corp. is offloading its stake in struggling British online shopping firm THG to co-founder Matthew Moulding and Qatar Investment Authority, after its shareprice has collapsed over the past year.
The share sale marks the end of the disastrous investment by SoftBank that began in May 2021, after becoming a cornerstone investor in THG as part of a $1 billion fund raise.
While it is unclear exactly how much SoftBank lost on the deal, the THG stake was worth over £500 million when it first announced its shareholding last year. By Monday, the value had fallen to about £36 million.
Investment vehicle SB Northstar will sell its stake for £31 million ($35.3 million) to Moulding and QIA, according to a statement Monday. The QIA, already a shareholder, will take about 84 percent of the sale, expected to take place on Oct. 20.
Founded in 2004 by Moulding and John Gallemore, THG, formerly known as The Hut Group, started out selling CDs but today operates hundreds of websites offering beauty, skincare and health-food products as well as helping rivals sell online via Ingenuity.
After THG’s successful £5.4 billion float, SoftBank struck a deal with the company, which included an option to buy a 20 percent stake in its Ingenuity business at a lofty valuation of £4.5 billion. However, after skepticism from analysts over the unit, SoftBank said in July it would not take up the offer.
“We at THG extend our thanks to SoftBank for their support as a financial and commercial partner,” Moulding said in a statement on Monday. “We will continue to benefit from the relationships formed across their international technology portfolio.”
Takeover speculation has constantly swirled around THG after Moulding said he regretted floating the company and hinted he may take the business private again. The co-founder has kept a tight grip on THG as a major shareholder, landlord and chief executive and only relinquished the role of chairman in March.
SB Northstar, a trading vehicle set up by SoftBank founder Masayoshi Son, was set up in 2020 and aimed at using the company’s excess cash to make some money picking stocks. Son took a personal 33 percent interest in the unit, while the company held the rest of the equity.
However, the unit has been hammered by falling tech stocks. SoftBank said it would recognise a loss of 670 billion yen ($4.5 billion) for the last fiscal year, with Son on the hook for 315 billion yen.
Giles Turner
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