Shares of THG jumped on news of Japanese firm SoftBank selling its stake in the struggling British e-commerce group to its co-founder Matthew Molding and Qatar’s sovereign wealth fund.
The move cemented Molding’s control of THG, formerly known as The Hut Group, which owns a range of internet-based health and beauty retailers, and ended speculation about SoftBank’s disastrous investment.
The Japanese company, led by its founder, Masayoshi Son, is offloading its stake – which was once worth £500m – for £31m, realizing a loss of £450m on its investment. It bought an 8% stake in THG for £481m in May 2021 to help fund the expansion of its tech platform months before its London IPO.
THG shares were up 10% in early trading and then traded down 9% to 49.9p. However, shares have fallen 86% in the past year as the company struggled with slowing sales.
THG owns retail sites Lookfantastic, Glossybox, Zavvi and Coggles, as well as beauty brands such as ESPA and Illamasqua, and sports nutrition brand Myprotein. It was founded in 2004 by Molding and John Gallemore, who started out selling CDs and DVDs online for other retailers.
SoftBank’s disposal comes as it moved to liquidate its in-house hedge fund SB Northstar, which has racked up losses of around $6bn (£5bn).
THG said SB Northstar had agreed to sell 80.6 million THG shares, or its entire stake, to Qatar Investment Authority and Moulding, the managing director of THG. The shares will be sold at 39p each on Thursday, below Monday’s closing price of 45p. QIA, which is already a shareholder, will buy 84% of the shares.
SoftBank ended a deal in July that would have seen it acquire a fifth of THG’s Ingenuity technology division.
In a stock market update, Molding said, “We at THG extend our thanks to SoftBank for their support as a financial and business partner, and we will continue to benefit from the relationships forged across their global technology portfolio.
“I am delighted to further increase my family’s stake in THG, continuing our unwavering support following other recent stock purchases.