18th Oct 2022 14:38
(Alliance News) - THG PLC's founder topped up his stake in the e-commerce platform, in a move which could "increase" rumours of the firm going private again, analysts at Liberum said on Tuesday.
SoftBank Group Corp has sold its stake in the e-commerce company at a cut price, THG said on Monday.
SoftBank will sell 80.6 million shares at a price of 39 pence per share, bringing its total disposal to GBP31.4 million. The shares were valued at around GBP480 million at the time of initial investment, however, meaning the Japanese technology investment firm will write off GBP450 million.
THG shares had closed at 45.84p on Monday in London. Shares were up 14% to 52.06p each on Tuesday afternoon.
Qatar Holding LLC, which is wholly owned by Qatar's sovereign wealth fund Qatar Investment Authority, will buy 67.8 million while THG founder Matthew Moulding will take the remaining 12.8 million.
It is not the first time this year that Moulding has supplemented his THG stake.
"This acquisition by FIC Shareco on behalf of Matthew Moulding further evidences his commitment to the group and its strategy, and is his fourth investment in THG since IPO, with over GBP38 million invested in August 2021, July 2022 and October 2022," analysts at Liberum commented.
It means Moulding has an interest in roughly a quarter of THG's total voting rights.
Liberum in September lowered its THG recommendation to 'hold' and sees very little catalysts for a rating lift, at least from a trading perspective.
"We moved to 'hold' at the interims due to downgrades, capex plans have been cut, and focus has moved to restoring profitability and generating [free cash flow] at a time when capital is difficult to raise, and the group has over GBP200 million of net debt. On an underlying basis the group is cheap (especially if you apply a sum of the parts) but we see little catalyst coming from trading considering the consumer backdrop," Liberum explained.
"However the further increase in Mouldings stake and by QIA may very well increase rumours that THG will be subject to a potential management buyout."
Going private would round off a tough stint on the London market for THG.
THG made its London Stock Exchange debut back in September 2020. Life as a listed company has not been plain-sailing for the company since then.
Shares floated at 500 pence each. It is currently trading 71% off its IPO price.
A capital markets day in October of last year, designed to shore up investor confidence, spooked traders instead. Since then, THG's stock has faced heavy selling pressure.
In September last year, THG announced plans to spin-out THG Beauty, its biggest unit in terms of revenue as a separate listing in the first half of 2022. However this spin-off has failed to materialise.
In October of last year, THG announced its intent to list on the Premium segment of the London Main Market in 2022. This move is now only expected in 2023, however.
THG also received takeover interest, though earlier this year suitors Candy Ventures Sarl, owned by Nick Candy, and Belerion Capital Group Ltd opted against making an offer.
By Eric Cunha; [email protected]
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