THG Shares Gain as Kelso Group Ups Stake

Kelso Group (LON: KLSO) said Friday that it has increased its stake in THG (LON: THG) through a contract for difference (CFD), taking its total holding to 8 million shares through a mix of ordinary shares and CFDs.

The company explained that one of the key reasons for its investment is the value in THG's nutrition business, MyProtein, as people move to focus more on their health and nutrition.

However, they called for a seperation of MyProtein if THG does not receive an acceptable offer that takes into account MyProtein's value.

Kelso noted two listed “pure play global health nutrition” companies, Celsius Inc and Bellring Brands Inc, and said MyProtein's direct-to-consumer digital model would be “highly attractive” to many of these companies.

“Any forthcoming offers for THG as a whole must clearly reflect this underlying value and in the event that an acceptable offer is not forthcoming then a separation of MyProtein should be considered, alongside a potential partnership and minority investment from companies such as those highlighted,” Kelso stated.

“Kelso believes that THG's nutritional business is likely ultimately to end up being owned by one of the large global food and beverage companies, all of which have already begun investing in nutritional, wellness and healthier assets to improve the mix of their sales between nutrition and chocolate or sugar products. All those transactions again support Kelso's sum of the parts view of THG.”

On Monday, THG (LON: THG) shares surged more than 44% after revealing it had received a “highly preliminary” proposal from Apollo Global Management Inc. The stock is up 5% Friday.