Having joined the stock market amid significant hype about its future growth potential and then fallen flat on its face amid criticism around corporate governance, a lack of transparency and a squeeze on margins, one might wonder why THG has attracted takeover interest.
While the company hasn’t disclosed who was behind recent approaches, one can only speculate it is private equity looking to sift through the bones of the company after its share price collapse. Even bad businesses might offer some value if you look hard enough.
“Chief executive Matthew Moulding has had many a cold shower since THG joined the stock market and he certainly isn’t going to let an asset stripper pick up the company on the cheap,” said AJ Bell’s Russ Mould.
“Whether his idea of what the business is actually worth is reasonable or (more likely) in fantasy land, one cannot help feel that long-suffering shareholders might welcome a chance to get out now at a small premium to the market price so they can at least cut their losses and put the sorry episode behind them.
“The share price is trading 80% lower than its 500p IPO price in 2020, making it one of London’s worst stock market listings in recent years.
“As for the latest state of play, THG’s trading update contains more adjustments than a tailor’s shop.”