The retail company also posted a 2.6% uplift in revenues for its 2022 trading period, boosted by a strong performance in the UK market
THG, which owns hair care brand Christophe Robin, issued a profit warning in January 2023
Stocks in the online retail giant soared following the announcement, jumping by 44% to 93.45p per share at the start of trading on 17 April.
Apollo’s offer looks to acquire the entire share capital of THG, and it has until 15 May 2023 to announce a firm offer for the retailer or pull out of the deal.
THG stressed that there is “no certainty” a firm offer will be made, and added that it plans to make further announcements “if and when appropriate”.
The shares increase is a welcome boost for the embattled retail company, which issued a profit warning for its 2022 trading period in January.
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.
This was supported by a particularly strong performance from the UK market, which generated sales in excess of the expected group growth rate.
Group revenue also increased by 4.1% during the year across its core divisions THG Beauty, THG Nutrition and THG Ingenuity.
However, the group incurred an operating loss of £495.6m during the period, impacted by a non-cash impairment of £275.4m.
THG, previously The Hut Group, was founded in the UK in 2004
"We are nearing completion of a three-year major infrastructure investment programme,” said THG CEO Matthew Moulding.
“While this has inevitably involved significant investment and transition costs, the less than two-year return on investment is pleasing.
“The global capability it now provides gives us increased confidence in our ability to continue to capture market share whilst accelerating both profitability and free cash flow generation."
Despite the uplift in sales for the year, THG reported an 8.6% decline in sales for its first quarter of trading in 2023.
The business remains confident, however, and expects ongoing input cost deflation and the annualisation of cost actions to improve profitability over the coming year.
"The challenging macro and inflationary environment required decisive action across the business with around £100m of efficiency savings delivered,” added Moulding.
“A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses."
In January, THG named Damian Sanders as its new CFO.
Sanders took on the role with immediate effect, and has been part of the THG board for the past two years, having joined as an independent, non-executive director in November 2020.