THG Plc shares soared as much as 47 percent after the embattled UK online retailer said it received a non-binding acquisition proposal from Apollo Global Management Inc.
The New York-based private equity business now has until May 15 to decide whether to make a firm offer, THG said in a statement Monday. The company did not disclose the value of Apollo’s initial proposal.
Formerly known as The Hut Group, the company co-founded by chief executive officer Matthew Moulding has had a bumpy ride since its 2020 listing due to governance concerns, the surging price of whey — which it uses in its protein shakes — and speculation over the future profitability of its Ingenuity unit, which helps other retailers sell online.
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 rejected a bid from the Belerion consortium that valued the firm at £2.1 billion ($2.6 billion), saying the offer of 170 pence per share “significantly undervalued the company.” THG shares are currently quoted around 93 pence.
Earlier this year, THG announced a strategic review of loss-making businesses outside of its core beauty, nutrition and Ingenuity platforms. The e-commerce group operates hundreds of websites, and the review is intended to simplify the business.
THG, which reports full-year results on Tuesday, also warned in January that profit will be lower than forecast.
SoftBank Group Corp., a one-time anchor investor, sold its stake in the group last year.
THG shares have lost more than 80 percent of their value since the listing, with some investors betting on further declines. Shares out on loan, an indication of short interest, represent about 10 percent of the company’s free float, according to data from S&P Global Market Intelligence as of April 13.
By Katie Linsell
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