THG Rejects ‘Largely Unfunded’ Takeover Proposal For Myprotein

THG (LON: THG) confirmed Wednesday that it rejected an unsolicited takeover proposal from Selkirk to acquire its flagship nutrition brand, Myprotein, citing concerns over valuation and funding.

The non-binding offer, which valued Myprotein between £400 million and £600 million on a cash-free, debt-free basis, was largely to be paid in newly issued Selkirk shares. 

The remaining consideration was proposed to be funded through equity and debt issuance, which THG described as “largely unfunded” and lacking sufficient clarity on funding sources.

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THG shares are up around 3.7% shortly after the open.

In a statement, THG said its board “considered that the Proposal fundamentally undervalued Myprotein and its prospects” and presented “significant execution complexity and risks,” particularly regarding Selkirk’s ability to raise the required funds. 

The company confirmed there has been no further engagement with Selkirk since the proposal was rejected.

The rejection comes as THG continues to streamline its business following the demerger of its Ingenuity division in January and a recent successful refinancing. 

The company said it has reduced both gross and net debt and secured long-term banking facilities as it focuses on growth and cash generation.

THG is scheduled to release its preliminary results and first-quarter trading update on or around 30 April.