Selkirk responds to THG on MyProtein offer – ‘we reserve the right to reconsider’
Selkirk Group PLC, the AIM listed cash shell which has made an offer to buy MyProtein from THG has said the nutrition business is “dramatically undervalued” and a successful reverse takeover would be advantageous to THG and its shareholders.
The £400m to £600m offer would have comprised a mix of cash and new shares in Selkirk, which it claimed would have to be issued at a premium to the current Selkirk share price.
The statement issued this morning said: “Unfortunately, after consideration by the board of THG, the Offer was rejected based on (i) valuation, (ii) proposed structure of the offer (iii) the deliverability of the offer and (iv) a lack of certainty that a newly listed MyProtein would have sufficient stock market trading liquidity. Whilst we respectfully disagree with the conclusions, we would like to thank the board of THG and their advisers for their time and efforts in considering our proposal.
“Where we are completely aligned with the board of THG is in its conclusion that MyProtein is a world class brand with tremendous growth prospects, but which is currently dramatically undervalued by the UK market. Whilst Selkirk is no longer in any form of discussions with THG, we reserve the right to reconsider this in future should there be a change in circumstances.
“In parallel, Selkirk has continued to build a pipeline of acquisition opportunities. We remain more convinced than ever that our reverse takeover into a listed vehicle model is a strong option for companies either seeking to IPO or for existing listed companies looking to realise value for a subsidiary. Our model gives the owners of assets the opportunity to realise the benefits of a market listing – price discovery, ongoing access to capital and brand profile – whilst maintaining exposure to valuation upside.
“The Board of Selkirk will continue to actively pursue our current pipeline. The Board, its advisers and its larger shareholders have significant experience both in the target sectors and the wider UK stock market. Meanwhile we have continued to focus on a disciplined filtering approach to opportunities and preservation of the capital raised at IPO.
In a statement this morning (23 April 2024) which was highly dismissive, THG rejected an offer from cash shell Selkirk to acquire MyProtein which it dismissed as “wholly unsolicited, largely unfunded, highly conditional and non-binding”.
The statement was supposedly in response to “media speculation” of which there was none.
However, the offer for Science in Sport, which values the Blackburn-based business at £82m, and last year’s £300m plus float of Applied Nutrition, on healthy multiples of earnings, must have left the THG board frustrated at the lack of recognition by the market in their undervalued supplements and nutrition business.
“The Board considered that the Proposal fundamentally undervalued MyProtein and its prospects, and in addition carried significant execution complexity and risks, in particular the ability of Selkirk to raise sufficient funding. On this basis, the Proposal was unequivocally rejected by the Board. THG confirms that there has been no further engagement with Selkirk since the Proposal was rejected,” the statement said.
THG demerged its ecommerce and logistics business Ingenuity at the start of 2025, and has refinanced the remaining group into a THG Beauty and THG Nutrition divisions, thus reducing gross and net debt, securing long-term banking facilities and focusing on growth and cash generation.
The Group’s preliminary results and Q1 trading update are expected to be announced “on or around 30 April 2025.”
Iain McDonald
Selkirk was set up as a cash shell in October 2024 by former THG director Iain McDonald, who stepped down from THG after 14 years, saying he wanted to buy “an undervalued company or business in the UK” in the consumer, technology and digital media sectors.
It did a £7.5 million capital raise, partly funded by McDonald’s Belerion Capital vehicle which provided 18% of the funds, while activist investor Kelso Group, which has long been a thorn in THG’s side, claiming the group should be broken up, also supported the move.
McDonald is working alongside another former THG director Angus Monro.
Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “THG boss Matt Moulding always made out there was hidden value in the business and no-one listened… until now. An approach from Selkirk to buy THG’s MyProtein business for up to £600m puts down a marker for what the division is worth, and it’s more than the value of the entire group as of last night.
“For all the drama around THG since it’s been a listed business, it does deserve credit for building up MyProtein into one of the leading brands in the fitness and wellness world.
“There is a big craze, particularly among young people, to hit the gym and have a protein-heavy diet. Protein products are everywhere but MyProtein has done a good job at standing out from the crowd. That’s partly down to THG’s marketing tactics, always offering deals on MyProtein products via its direct-to-consumer operations and that’s helped to build up a loyal fanbase.”
He added: “This success has paved the way for MyProtein’s products to be stocked in supermarkets and that has further widened the net for reaching existing and potential customers.
“It’s exactly the type of business that would appeal to an outfit looking to capitalise on a hot trend. While THG has rejected Selkirk’s approach, this might have fired the starting gun for other interested parties to think about making a move.”
Shares in THG rose 5.5% to 30.65p in early trading on Wednesday, but closed down on the day at 28.60p.
THG’s broker Peel Hunt said it values THG Nutrition at £775 million, equivalent to 1.2 times revenue and 12.8 times EBITDA.
