The Hut Group shares plunge as it walks away from Apollo takeover talks

THG saw its shares jump by nearly a third after a takeover approach (The Hut Group/PA) (PA Media)
THG saw its shares jump by nearly a third after a takeover approach (The Hut Group/PA) (PA Media)

Shares in The Hut Group (THG) plunged as the online retailer revealed today it had walked away from takeover talks with private equity firm Apollo.

THG had announced last month that Apollo had made a “highly preliminary” buyout proposal, prompting the ecommerce group’s shares to surge.

But after starting talks, The Hut Group’s board said it now believes there is “no longer any merit in continuing to engage with Apollo”.

On LinkedIn, THG founder Matt Moulding said private equity interest in the group was common, but the group was required to disclose the talks with Apollo because of a “leak”.

Moulding said that while a private equity deal could be lucrative for himself and other top THG executives because it would take the group away from the “daily market manipulation” of public llistings, the deal fell apart over control.

“Yes, it allowed existing shareholders to stay invested, with me continuing to run the group,” he said.

“But Apollo also wanted PE controls, particularly across Beauty & Nutrition where they asked for controlling equity rights.

“Like all previous bidders, Apollo were told their bid valuation and structure was unacceptable.”

The group, known for its protein and beauty products, has racked up huge losses in recent years, but its chair Lord Allen of Kensington said the board was confident in its long-term prospects.

Shares initially fell by more than 17% and despite a rebound, remain down 10.7% at 66.7p. That’s still less than a tenth of the price of THG’s 2017 IPO.