Shares in e-commerce retailer THG surged early on Friday after the firm received and rejected a third takeover offer from Belerion Capital Group and King Street Capital Management yesterday afternoon.
THG said the unsolicited, highly preliminary, and indicative non-binding proposal of 170.0p, a 46% premium to Thursday’s closing price, would see the Belerion consortium acquire the entire issued and to be issued share capital of the group.
However, THG thinks the proposal “significantly undervalued” the company, as well as its future prospects, and unanimously rejected the offer.
Property investor Nick Candy’s Candy Ventures also confirmed on Thursday that it was in the preliminary stages of considering a possible £1.4bn offer for THG. Candy now has until 16 June to make a formal bid or walk away under UK takeover rules.
Analysts at Liberum, who previously noted that THG’s share price decline of roughly 80% over the last twelve months was “excessive”, said the stock remained “highly undervalued” and stated a potential bidder could take the company private and look to later relist in the US, where tech companies receive “much greater appreciation” from investors.
“The three Key THG businesses – beauty, nutrition and ingenuity – combined should generate over £2.0bn in sales in 2022, and if separated out, would be highly valued strategic assets in their own right which should underpin the valuation,” said Liberum. “We continue to see potential for some form of corporate activity unless the share price recovers meaningfully.”
As of 0845 BST, THG shares had rallied 27.18% to 148.10p.
Reporting by Iain Gilbert at Sharecast.com
