THG shares plunged nearly 20 per cent after the struggling online retailer said it had terminated takeover talks with private equity giant Apollo.
The company’s board told investors on Friday there was ‘no longer any merit’ in continuing the discussions after THG rejected the latest buyout proposal, which it said was based on ‘inadequate valuations’.
Formerly known as The Hut Group, the company behind websites Lookfantastic and Myprotein received a preliminary offer from Apollo on 17 April.
Talks collapse: THG said Apollo’s offers were based on inadequate valuations
The private equity firm had until 15 May to make a firm offer, or walk away, but THG said it was not in its best interests to seek an extension to that deadline.
THG shares rose by more than 40 per cent last month when it received the preliminary takeover proposal, but fell as much as 18 per cent in early trade, before recouping some losses to trade down 12 per cent to 66p.
The move follows months of speculation about the future of THG, whose shares plunged 85 per cent following its £5.4billion float in 2020, with the company now valued at just £844million.
‘It has become clear to the board, supported by shareholders representing a majority of THG’s issued share capital, that there is no longer any merit in continuing to engage with Apollo,’ THG told investors today.
‘Consideration and rejection of the indicative proposal has been on a basis consistent with all previous offers for the company, some a matter of public record, which were also rejected based upon inadequate valuations and the nature of those offer structures.
‘Having discussed with its financial and legal advisors, the Board has unanimously determined that it is not in the best interest of THG shareholders to seek an extension to the deadline’.
In a separate statement, Apollo also said it no longer planned to make an offer for the company.
THG has had several setbacks since its bumper London float, with the company seeing annual losses almost treble to £550million last year.
But this has not put off activist investor Kelso, which last month upped its stake in THG, saying it had belief in the ‘significant intrinsic value’ of the e-commerce business’ nutrition arm.
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