THG shares have surged after the retailer confirmed it received “a highly preliminary and non-binding indicative proposal” for a buyout from private equity firm Apollo Global Management.

Matt Moulding (photo credit - Peter Searle)

Source: Peter Searle

There is speculation that CEO Matt Moulding wants to take the company private

Shares of the online retailer rose more than a third on Monday after it confirmed the news.

THG did not disclose any pricing information and said Apollo is required to make an offer by May 15, in accordance with the rules of the board. 

The group said there is no certainty that any offer will be made and any update will be communicated in a further announcement.

The announcement came after speculation over the weekend that founder and chief executive Matt Moulding was mulling taking the company private as it prepares to reveal deepening losses at its full-year financial results tomorrow. 

The online retail group, which owns a raft of health and beauty brands, first floated on the London Stock Exchange in September 2020, becoming the biggest London IPO in five years.

Since then, THG’s share price has slumped by three quarters amid investor doubts over the real value of its Ingenuity tech business and a lack of proper corporate governance.

The news follows THG’s last trading update, in which it reported record annual sales of £2.25bn but also warned on earnings.

THG changed its profit guidance to an adjusted EBITDA expected between £70m and £80m for 2022. Previously the figure had been anticipated to be as much as £130m.

At the time Moulding said: “We remain highly confident of delivering adjusted EBITDA margins in excess of 9% over the medium term… we are well positioned for further operational and strategic progress, notwithstanding the continued macroeconomic uncertainty.”

THG is expected to give its latest trading update on Tuesday April 18.  

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