Fresh blow for Moulding after Softbank investment deal axed

THE Hut Group suffered a fresh setback as an agreement with one of its biggest backers over a huge investment in its tech arm was scrapped.

The embattled retailer – now known as THG – abandoned plans for Japanese investment giant Softbank to buy 19.9pc of its Ingenuity business for £1.3bn.

Softbank bought a 6.5pc stake in THG in May last year. At the time THG gave Softbank the option to buy the stake in Ingenuity, valuing the division at £5.25bn.

But a near-90pc crash in THG’s share price since signing the deal has left the entire business – including Ingenuity – worth just £868m.

THG said that the firms have ‘mutually agreed’ to terminate the agreement, blaming the bleak economic outlook.

Shore Capital retail analyst Clive Black branded the episode ‘a circus’, adding that Softbank could buy the whole of THG for ‘small change in its world’.

And he said THG’s value was ‘puffed up’ by ‘too much money chasing too few assets’.

THG – founded by Matthew Moulding ( picturedleftwithwifeJodie) – was seen as the darling of the stock market when its shares listed at 500p each in 2020, and it was the biggest London float since the Royal

Mail in 2013. But it has been hit by corporate governance concerns and questions about its lofty valuation, which have led to the crash in its value.

Shares tumbled by as much as 6pc, closing down 5.7pc, or 4p, at 66p.

THG said that the decision would not affect Softbank’s investment in the business or their partnership.

The two firms also agreed in May last year to roll out each other’s technology across their brands, including THG using robotic warehouse system Autostore, which is 40pc owned by Softbank.

THG also said yesterday that it has finalised a split of its three divisions, Beauty, Nutrition and Ingenuity.