THG’s activist shareholder Kelso has ramped up its campaign for the ecommerce company to affirm its break-up plans.
The shareholder has written to the company’s board requesting a stock market statement containing its proposals relating to the de-merger of its three divisions.
THG, which floated in 2020 with a valuation of £5bn, operates a beauty business, a nutrition arm and an ecommerce services platform, Ingenuity.
However, its share price has since plummeted and the group is now worth around £1bn.
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In Kelso’ letter, seen by The Times, the investor said that de-merging the divisions would help to address “the inherent disparity between THG’s share price and true value”.
The letter said: “Kelso continues to believe strongly that the three distinct businesses within THG are worth considerably more as separate businesses than the current market capitalisation.
“The stock market does not value diversified conglomerates, which THG is deemed to be. We do not propose to suggest the order of events, merely that it is made clear to shareholders that all options are being considered.
“Such an announcement would, in our view, help to close the valuation gap and so enhance the ability to achieve the true value in any of the de-merger options.”
THG has yet to confirm whether it will split up the group’s division’s into separate entities.
The company fueled speculation back in October when it was revealed it was considering a US listing for its MyProtein business.
THG boss Matthew Moulding snapped up a 3.2% stake in Kelso Group last week, becoming the business’ third-largest shareholder.
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