THG's share price surges after Apollo bid approach

By

Sandra Halliday

Published
Apr 17, 2023

Shares in under-pressure UK online beauty e-tailer and e-commerce services provider THG leapt 40% at one point on Monday after it released news of an early-stage takeover approach from US private equity firm Apollo Global Management.

The company — which owns e-tail operations such as Lookfantastic and Cult Beauty, as well as the Ingenuity business that provides e-commerce ops for other companies — said “it is currently in receipt of a highly preliminary and non-binding indicative proposal” from Apollo.

As mentioned, the share price jumped, and its market value is now £1.17 billion as a result. But that’s still well below the value it commanded when it first listed its shares a few years ago. Back then they cost 796p each compared to 90p at present and just 66p on Friday afternoon.

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It’s not the first takeover approach that THG, which issued a profit warning earlier this year and also launched a strategic review of loss-making parts of its business, has seen.

In recent times it has rejected a number of bids for the group, including one adding up to £2 billion from a combo of investment companies Belerion Capital Group Limited and King Street Capital Management. It had said the deals it turned down “significantly undervalued” the company. So it could well take the same view of this latest approach.

But at least it appears that there are savvy private equity investors out there who see value in the company. Its own shareholders have become increasingly impatient about its slow progress since its IPO earlier this decade.

Interestingly, the takeover talk also seemed to boost the share prices of other British e-commerce stocks, including giants ASOS and Boohoo Group, as well as smaller peer Sosandar. They all rose about 4%-5% on Monday.