THG (LON: THG) shares surged more than 44% Monday after the company confirmed it had received a preliminary bid approach from Apollo Global Management, but the stock is down over 6% at the time of writing on Tuesday following its 2022 preliminary results and Q1 trading update.
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Monday's move by the private equity firm continued the theme of M&A activity in London on Monday, with Middle Eastern credit card processor Network International confirming it had received a non-binding proposal from CVC Advisers, while Scottish engineering firm Wood Group revealed it will engage with Apollo Management for a firm offer.
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In its statement, responding to press speculation regarding the Apollo approach, THG said, “It is currently in receipt of a highly preliminary and non-binding indicative proposal from Apollo Global Management Inc. (“Apollo”) on behalf of certain of its affiliated funds, to acquire the entire issued and to be issued share capital of THG.”
Under takeover rules, Apollo has until May 15 to make firm up a proposal.
THG shares closed Monday's session at 95.76p per share. However, it is currently at 89.56p after the results disappointed.
Formerly The Hut Group, THG reported an operating loss of £495.6 million in FY2022, rising significantly from the £137.5 million operating loss reported in 2021. However, it was impacted by a non-cash impairment of £275.4 million and £69.3 million of non-recurring costs.
THG (LON: THG) revenues in 2022 increased 2.7% to £2.24 billion. However, in the first quarter of 2023, group revenue fell 8.6% to £469.4 million.
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