Shares in THG rise as investors prepare for multi-billion war bidding prospect for online beauty shop
- Shares of THG rose 24.5%, increasing their value by almost £ 400 million to £ 1.8 billion
- The company said it had rejected the offer from Bellerion and King Street
- Real estate mogul Nick Candy has announced his intention to take over THG
Shares of THG soared yesterday as investors prepared for the prospect of a multibillion-dollar war of bidding for an online beauty store.
The stock rose 24.5 per cent, or 28.55 pence, to 145 pence, increasing its market value by nearly £ 400 million to £ 1.8 billion after two buyers appeared on Thursday.
The company, formerly known as The Hut Group, said it had turned down an offer from Belerion Capital and King Street Capital for £ 2 billion or 170 pensions. At the same time, real estate mogul Nick Candy announced his intention to take over the sick giant of beauty and makeup.
Shine Cash: THG boss Matt Molding, in red chests, partying with friends
Ian MacDonald, founder of Belerion, has been one of the first supporting and non-executive directors since 2010.
But analysts and investors say potential contenders will have to raise their bids if they want to bring CEO and founder Matt Molding to the negotiating table, adding that a bid of 200 pensions – or £ 2.4 billion – would be the minimum THG, which, will probably entertain. The bids are not surprising given the declining stock price over the past six months. Molding himself started the fire after he said in November that the company’s listing in London was “shitty from start to finish”.
His approval will be crucial to the success of any takeover, as he has a “special share” that allows him to block potential bidders.
Neil Wilson, an analyst at Markets, said: “The 170p offerings from Belerion have never been enough. Casting and other investors will not be attracted. Let’s see what Nick Candy has to offer. 200p is the absolute minimum to start with. ‘
A source close to Candy said the billionaire is believed to want to make THG private, adding that he could file a formal application early next week.
A source said: “He is very serious about this deal. He knows Matt Molding, I don’t know if he’s met him recently. But they know each other socially. ” He added that Candy hired bankers, although he declined to give their names. In the past, Deutsche Bank worked for Candy.
If successful, it will be the first major Candy takeover deal. The billionaire was considering the takeover of Capital Counties investment fund in 2019 and recently announced interest in buying Chelsea football club.
One of THG’s largest shareholders said it was “stuck” waiting for more bids, adding that the approach of 170 retirees per share gives the business little value in terms of its sales. Recent private deals for similar food and wellness businesses, such as the acquisition of Nestle Orgain, have attracted much higher praise.
“Our view is that THG is much underestimated,” the investor added. Another investor said he was confident THG would be withdrawn from the market this year, saying he needed to turn away from the public eye.
The head of the fund suggested that the participants of private actions may also be interested. Apollo and Advent International have previously been associated with the firm.
But others were skeptical that the deal would happen, noting that shares of THG still closed yesterday 14 percent below the rejected bid price. Roland French, an analyst at Davy, said: “The market is dismissing the likelihood of a bid approach in the short term – the language used by THG has been strongly warned.”
THG was the largest London volume since Royal Mail in 2013, and shares exceeded 800 pence, but corporate governance concerns and questions about the value of its Ingenuity technology business led to a drop in shares.
THG shares are rising as the war for online shopping approaches
Source link THG shares are rising as the war for online shopping approaches