THG: Beleaguered firm gets buyout proposal from Apollo as share price jumps 38 per cent
THG’s shares surged by more than a third after the online retail platform said on Monday that it has received a preliminary buyout proposal from private equity firm Apollo Global Management APO.N, without disclosing terms of the proposal.
Apollo must announce a firm intention to make an offer by May 15 or walk away, THG said in a statement.
Apollo did not immediately respond to a Reuters request for comment.
After the takeover bid Apollo also said it is set to open a new office in London as it seeks to continue its expansion into Europe amid a flurry of dealmaking.
London-listed THG’s shares were up 38 per cent at 91.29 pence as of 11:55 GMT.
This comes after THG boss Matthew Moulding brought in a new chief finance officer, Damian Sander, in January, following a slew of negative earning reports.
THG is publishing its full-year results on Tuesday.
Victoria Scholar, head of investment, interactive investor, said:“Another PE offer comes to the table. London-listed tech company THG said it received a buyout proposal from Apollo Global Management, although terms of the potential deal are unknown. Apollo has until 15th May to make a formal offer.”
“THG has been the subject of takeover speculation from private equity since last year with reports in February that Apollo, Advent International and Leonard Green Partners were circling the e-commerce group.”
She said it “has suffered heavy share price declines, down almost 90 per cent since its £5.4 billion listing in 2020 before today’s jump. Shares are up over 40 per cent, hyped by the prospect of a buyout.”
“The business has been struggling with heavy losses, job cuts, delivery disruptions, rising debts, and cost inflation. It issued a profit warning in January after full-year revenue growth came in at just a fraction of analysts’ expectations.
“THG and Deliveroo are among the high profile London flotation disasters in recent years, denting confidence in the UK among international investors as a key destination for tech IPOs.”
More to follow
Muhammed Husain in Bengaluru; Editing by Shailesh Kuber – Reuters