Investment firms step away from £2bn THG proposal

Two investment firms that were considering a £2bn bid for THG have this morning confirmed they will not be making a formal offer.

Belerion and King Street Capital Management had made an “unsolicited, highly preliminary and indicative non-binding proposal”, which THG revealed on May 19.

At the time THG’s board said the offer “significantly undervalued” the company and its future prospects.

The market had been unconvinced an offer would materialise. THG’s share price never reached the 170p-per-share level indicated and very quickly fell away. It closed last night at 105p, valuing THG at £1.3bn.

Candy Ventures also ruled itself out of bidding for THG, issuing a statement to the stock exchange today, saying: “Following the statement on 19 May 2022 in which Candy Ventures Sarl (Candy Ventures) confirmed that it was in the very early stages of considering a possible offer for the entire issued and to be issued share capital of THG plc, Candy Ventures today confirms that it does not intend to make an offer for THG.”

THG is a target because it has endured a very tough second year since it went public. THG raised £1.88bn when it completed its IPO in 2020, and its share price initially soared as its market valuation hit £9bn, before collapsing.

Takeover rules mean Belerion and King Street Capital Management are now restricted from making an offer for the next six months, except in specific circumstances such as a third party intends to make a firm offer for the group.

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