THG’s shares rose by almost 40% today (17 April) after the company disclosed receiving the proposal from the private-equity firm.
According to THG, Apollo must, as per UK takeover regulations, announce a firm intention to make an offer for the company by 17:00 BST on 15 May or walk away.
Before today’s jump in THG’s share price, the company’s stock has lost almost 90% of its value since the group’s listing in 2020.
In September 2021, shares in THG were worth £6.64. On Friday, the stock stood at £0.66.
Formed in 2004, THG owns nutrition and beauty brands including Myprotein protein shakes and Lookfantastic. It also acts as a D2C platform for other brands under its THG Ingenuity SaaS licensing business.
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The company is set to publish full annual results tomorrow. In a trading update filed in January, THG said it generated a 3.3% rise in sales to a “record” £2.25bn ($2.78bn) in the year to 31 December.
However, the trading update also included a profit warning. The group said the “combined impact of the lower full-year sales outturn, the dilutive impact of loss-making categories under review, alongside the timing of impending new Ingenuity contracts” meant it was forecasting “an expected adjusted EBITDA outturn range of £70m to £80m”.
“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,” Victoria Scholar, head of investment at Interactive Investor, told City A.M. today. “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.”