Online shopping group THG has dismissed “numerous” takeover approaches as “unacceptable”, saying they undervalued the company.
Manchester-based THG (formerly known as The Hut Group), which runs beauty and nutrition websites including Lookfantastic, Cult Beauty and Myprotein, confirmed there had been interest from third parties, but said the company was not currently involved in any talks.
“You will all be aware that there has been significant speculation about possible third party interest in THG,” its boss and founder Matthew Moulding said on Thursday. “I can confirm that the board has received indicative proposals from numerous parties in recent weeks.”
However, he said the board had “concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group, and confirms that THG is not currently in receipt of any approaches”.
“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the LSE at the appropriate time,” Moulding added.
The news sent THG shares up 15% on Thursday to 110p. Its shares are still far below the flotation price of 500p in September 2020, and far below their peak of 837p in September 2021.
It follows a turbulent year for THG, which faced criticism for allowing Moulding to serve as both executive chair and chief executive, which is against best corporate governance practice. The board also signed off on a deal that allowed Moulding to acquire a raft of THG properties before leasing them back to the company for millions of pounds a year.
News of the offers came as THG reported a 35% increase in revenues to £2.2bn, helping push adjusted earnings up 7% at £161m. First quarter results also showed a 16% jump in revenue to £520m.
Moulding said it was a strong performance that was ahead of targets set when THG went public a year and a half earlier. He singled out the strong performance of Ingenuity, a division building direct-to-consumer websites for other companies, which has been a key part of the company’s growth plans.
THG said it was aware of the rising cost pressures, and the “significant impact of short-term cost inflation on both global consumers and supply chains alike”.
However, the group said it believed the cost pressures would be temporary and pledged to “shield consumers” in the interim as part of efforts to build a long-term, loyal customer base, that it hopes will account for up to 80% of annual revenues.
