THG received the takeover proposal from Apollo in April 2023, which looked to acquire the entire share capital of the company
THG, the owner of Espa, posted a 2.7% sales rise to £2.2bn for is 2022 trading period
The British retailer’s board rejected the offer based on an inadequate valuation of the company, and said there is “no longer any merit” in continuing to engage with Apollo.
THG instead remains confident in its profitability in 2023 as an independent company, citing its work to improve operating leverage and generate working capital efficiencies.
This is backed by newly implemented strategic options to improve shareholder value across its Nutrition, Beauty and Ingenuity divisions, the company said.
“The board remains fully confident in THG's strategic direction and long-term prospects as an independent company,” said Charles Allen, Chair of THG.
“As stated in our recent results, with a strong balance sheet and category leading positions within substantial global end markets that continue to benefit from long-term structural growth, we have confidence in our ability to deliver long-term value for shareholders and remain on track to be cash flow positive in 2024."
The Manchester-based company originally received the takeover proposal from Apollo in April, which looked to acquire the entire share capital of THG.
Stocks jumped by 44% following the announcement, which was a welcome boost for the embattled retail company after it issued a profit warning for its 2022 trading period.
Despite the lower-than-expected results, THG ended up posting a 2.7% sales rise to £2.2bn for its preliminary 2022 full-year trading update.
However, the group incurred an operating loss of £495.6m during the period, impacted by a non-cash impairment of £275.4m.
The takeover proposal also saw THG’s CEO Matthew Moulding take to social media to berate the media’s negative coverage of the news and the beauty company.
A LinkedIn post by Moulding targeted the British press, hedge funds and bank analysts, which he said “regularly build negative coverage” against UK listed companies.
He claimed this is done by the three groups to bet on which share prices will fall.
This is achieved by “discrediting” companies using aggressive claims, which aim to impact share prices, Moulding continued.
However, Moulding stated the media coverage achieved the opposite intended effect.
“A throw-away line in an otherwise typically wildly inaccurate press piece, resulted in a share price spike and an obligation to make an announcement, culminating in a c.45% increase in the share price on the day,” said Moulding at the time.