THG shares rise after Softbank sells stake to founder and Qatar

Shares in ecommerce firm THG lifted on Tuesday after Softbank offloaded its stake to the firm’s founder and the Qatar Investment Authority.

The Manchester-based group’s stock rose by 10.2% to 50.5p in early trading as shareholders welcomed the move.

Nevertheless, THG’s shares have fallen to around 90% below the level when Softbank first purchased an almost-£500 million minority stake.

The exit by Softbank marked an end to the Japanese investment group’s disastrous investment in THG, writing off as much as £450 million from previous valuations of its stake.

THG, which was previously called The Hut Group, said late on Monday that Softbank has agreed to sell 67.8 million shares to Qatar’s sovereign wealth fund, while founder and chief executive Matthew Moulding will buy the remaining 12.8 million shares.

The online retail business, which owns brands including Cult Beauty and MyProtein, has been hit hard in recent months by slowing sales and rising cost pressures.

Mr Moulding said: “I’m delighted to be further increasing my family’s stake in THG, continuing our unswerving support following on from other recent share purchases.

“QIA shares the board’s vision of the scale of opportunity for THG, building a British global success story in large and growing addressable markets. QIA’s long-term investment approach is a positive endorsement for the UK as a whole.

“I’m incredibly proud of the progress the team continue to make in each of our major divisions, and believe the uncertain macro-conditions provide an even greater opportunity for THG to further disrupt global beauty, nutrition and technology markets.”

Liberum equity analyst Wayne Brown said: “On an underlying basis the group is cheap but we see little catalyst coming from trading considering the consumer backdrop.

“However the further increase in Mouldings stake and by QIA may very well increase rumours that THG will be subject to a potential management buyout.”