The THG PLC (LON: THG) share price was trading up 8.19% after the company’s founder Matt Moulding announced that he had given up his special share, which allowed him to veto any hostile takeover from other firms, especially PE firms that have been bidding to take the company private.
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The decision to give up his special share comes as the company seeks to join the prestigious FTSE 250 Index’s premium segment on the Londo Stock Exchange. The move must be verified and approved by the UK’s Financial Conduct Authority (FCA) before it can take effect..
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Moulding has been vocal on LinkedIn about his opposition to private equity (PE) firms taking over THG. He says they only care about loading the acquired company with debt before selling it off for large paychecks.
Some quotes from the founder include: “Just about every major PE firm has enquired about taking THG private. PE firms usually want majority ownership. We’ve been clear: don’t bid if you want 51 per cent, plan to use debt to leverage up, or won’t allow existing shareholders to stay invested. This rebuffs most PE firms.”
“Yes, it’s unpleasant being listed in London. But I’ve spent 20 years building THG, from an idea while sat on my sofa, into a global group with sales of £2.2bn. We’ve just completed a vast expansion of our tech and global infrastructure. We’re just getting going.”
THG also released a trading statement for its fiscal Q2 2023 today, which could have affected the share price.
The last takeover attempt was from PE giant Appollo in April and May when the PE firm wanted to take THG private. Reflecting on the takeover attempt, Moulding noted that Appollo wanted PE controls, especially in its beauty and nutrition segment, something the CEO was unwilling to give up.
However, there is a high likelihood that other PE firms may approach THG in the future, given that its share price has fallen from a high of 800p during its IPO in January 2021 to just below 77p today. The low share price makes it an attractive target for investment firms.
The company boasts revenues worth £2.2 billion, much higher than its market capitalisation, which stands at £978 million. Again, this makes it an attractive acquisition target.
*This is not investment advice.
THG share price.
The THG (LON: THG) share price rose 8.19% to trade at 79.3p from Tuesday’s closing price of 73.3p.
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