WWD Digital Daily

THG Walks Away From Acquisitio­n Talks With Apollo Global

● Shares of THG plunged 16.49 percent on Friday following the announceme­nt.


Online beauty retailer THG, formerly known as The Hut Group, has walked away from acquisitio­n talks with private equity firm Apollo Global Management Inc., the company said in a statement Friday.

Shares of THG plunged 16.49 percent to 62.42 pence after the announceme­nt was made.

Last month THG revealed that Apollo Global had made a preliminar­y bid.

THG at the time described Apollo's bid to acquire the entire issued share capital of the retailer as “highly preliminar­y” and nonbinding.

Apollo had until Monday under U.K. takeover rules to make a firm offer or walk away, but THG Friday said that there was “no longer any merit” to further discussion­s with the private equity firm as its buyout proposal was based on “inadequate valuations.”

“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,” the Manchester, England-based company added.

It's not the first time THG has turned down a takeover proposal. Last year, the company rejected several of them.

THG founder and chief executive officer Matt Moulding said those have all been “unacceptab­le” and had failed “to reflect the fair value of the group.”

THG has struggled on many levels since it listed on the London Stock Exchange in September 2020, and shares in the company have lost 85 percent of their value since the IPO.

THG owns online retailers including Cult Beauty and Lookfantas­tic, and brands such as Perricone MD and Espa.

In 2022, group revenue rose 2.7 percent to 2.24 billion pounds. Losses for the financial year widened to 540 million pounds from 138 million pounds.

THG said losses increased for a variety of reasons, including its efforts to limit customers' exposure to commodity cost increases, and its

275.4 million pound write- down of the software it uses to operate third-party websites.

It also listed a series of non-recurring costs in the period, including 32.4 million pounds spent on a strategic review;

18.5 million pounds on internatio­nal deliveries, predominan­tly in Asia, and mainly linked to COVID-19 restrictio­ns, and 14.8 million pounds in administra­tive costs following a company reorganiza­tion and related layoffs.

 ?? ?? The Hut Group's cofounder and CEO Matthew Moulding.
The Hut Group's cofounder and CEO Matthew Moulding.

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