Apollo Global Management has made an early bid for THG (THG), the online retailer, potentially pulling it off the market just two years on from its listing.
The shares hit 94p on Monday, climbing almost a third from the previous close after a statement from the company confirmed the approach. It added: "The board of THG notes the recent press speculation regarding THG and confirms that it is currently in receipt of a highly preliminary and non-binding indicative proposal from Apollo Global Management."
THG did not report the price per share attached to the bid. The company's share price has tumbled from almost 800p soon after its float to as low as 32p. It was trading at 66p at close on Friday, before the Mail on Sunday reported that Apollo had an offer in the works.
Private equity money spilling into London's listed market has ramped up in the past few weeks. Apollo has just had a bid for Wood Group (WG.) backed by the board, and in recent days Dechra Pharmaceuticals (DPH) and Network International Holdings (NETW) indicated they would accept offers from EQT and CVC Advisers and Francisco Partners respectively.
THG founder Matthew Moulding has frequently spoken out about THG's difficulties as a listed company and recently said the float "was not an experience I'd recommend to anyone".
Any offer would have to be supported by Moulding, who as of the last annual report published in May 2022, retained his golden share that in the case of a change of control vote "automatically [carries] such number of votes on any resolution put to shareholders as is necessary to ensure the effective passing or defeat of that resolution".
He also holds a 13 per cent stake in the company, as per FactSet. The other prominent shareholder is the Qatar Investment Authority with 7 per cent, which it bought from Softbank last year.
The company will release its annual results on Tuesday. Analysts expect another lossmaking year, with an operating loss of £137mn, compared with £10mn last year.
THG had pitched itself as a tech stock, because of its distributions systems, but was quickly valued like a retailer. There were reports of private equity interest a year ago (including from Moulding himself), but this is the first time the company has revealed a potential specific buyer. Apollo has a month to announce a firm intention to make an offer.
Moulding, a frequent Instagram user, wrote over the weekend that he had pulled out of a £10mn private equity buyout in 2010 after finding a new equity investment that allowed him to keep control. "We left the PE firm at the altar to their utter shock," he said. "THG was safe."
