Hut Group Founder, Molding, Sinks Gold Shares to Restore City Confidence | Economic news
Matthew Molding, head of online beauty, nutrition and tech services group THG, will give up his gold share in the company in an attempt to restore the City’s confidence after a scorching fortnight.
Sky News has learned that the owner of The Hut Group, which was launched just over a year ago, will announce next week its intention to move its listing to the premium segment of the London Stock Exchange in 2022.
To pave the way for this, THG executive chairman and chief executive Mr. Molding will cede his “founder’s share” – which would prevent a hostile takeover of the company – within the next year.
Sources in the city said over the weekend that the move would be announced next week, and possibly as early as Monday morning.
It will be an offer from Mr Molding, who is THG’s largest shareholder with a 22% stake, to establish a more conventional corporate governance structure after a disastrous week in which the company has lost billions of pounds of value.
The abolition of its dual-class equity structure and the eventual move to a premium LSE listing will be welcomed by institutional investors who have seen their holdings drop in value this week.
Some fund managers had objected to Mr Molding’s extent of control prior to his float last year, although THG said at the time that the “special share” would be withdrawn after a maximum of 36 months.
A city ally of THG supremo said the decision reflected “a willingness to listen to the views of external shareholders” on the existence of the “special share” structure.
“Matt wants to do the right thing by the investors who entered at the time of the IPO,” the source said.
An investor said on Saturday that Mr. Molding and his fellow board members are now also considering hiring an independent chairman as part of the process to move to the premium segment of the LSE.
The investor added that the corporate governance changes would be seen as a positive step, but were now essential if the company was to restore the confidence of its extended shareholder base.
Sky News has also learned that THG has been in talks in recent days to appoint Andreas Hansson, a senior executive at SoftBank, as a non-executive director.
Dr Hansson, a former executive at SoftBank-owned chip designer ARM Holdings, is chairman of Kahoot, an educational technology platform also backed by the Japanese group.
The appointment, which has yet to be finalized, would cement a relationship between THG and the Japanese tech investment giant which was unveiled in May.
As part of their deal, SoftBank invested $ 730 million in THG common stock and took an option – exercisable for up to two years – to purchase a 19.9% stake in THG Ingenuity, the division that builds and operates e-commerce sites for third party customers. like Homebase and Revolution Beauty, for $ 1.6 billion.
That option remains in place, and people familiar with the situation insisted this weekend that they were confident it would be exercised.
Appointing a director of a public company in which it has a stake would be a rare move for SoftBank, while THG’s agreement to allocate a seat on the board to a 6% shareholder underscored that their relationship was ” a real partnership, ”said an insider.
On a capital markets day this week, Mr. Molding spoke of Ingenuity’s potential, but immediately saw THG shares drop more than 30% amid skepticism about the lack of granular financial details provided on unity.
The magnitude of the share price drop stunned the company and its longest-serving external shareholders, including Chrysalis Investments, the much-loved team that backed fintech giants Klarna and Wise.
Other investors in THG before the IPO included BlackRock, the world’s largest asset manager, and KKR, the New York-listed private equity investor.
The Manchester-based company has long been hailed as one of the UK’s biggest tech success stories, though there is now intense pressure on its management to demonstrate that Ingenuity can become a growth engine. future profits.
Since THG’s IPO, its executive chairman has cemented his status as one of Britain’s richest people, landing a stock windfall worth over £ 800million at the late last year after achieving a number of financial targets set out in its IPO prospectus.
He already had a stake in the company worth around £ 1 billion.
Earlier this year, Mr Molding pledged a £ 100million stake in the company to a new charitable foundation, making him one of Britain’s largest individual philanthropists.
Nonetheless, THG’s promising public market debut has been followed by a scorching spell, with shares more than halving over the past year.
In addition to the Ingenuity spin-off project, he recently reiterated his intention to pursue a separate listing for his beauty division.
The company owns beauty sites like Lookfantastic and Glossybox, and announced in August that it would pay around £ 275million to take control of Cult Beauty, a leading independent platform.
THG is also home to an online nutrition business, including MyProtein, which it claims is the world’s largest sports nutrition brand.
Mr. Molding founded The Hut Group alongside John Gallemore – now its CFO – in 2004, and has since grown into a digital giant employing more than 10,000 people.
Ironically, his decision to sell his gold stock comes just months after a Treasury-sponsored review led by Lord Hill, the former EU commissioner, recommended that founders of fast-growing companies be able to keep a greater control after having rated them in double class. Stock.
Deliveroo and Wise are other prime examples of tech companies that introduced dual class equity structures this year.
THG was floating at 500p per share, giving the company a market value of £ 4.5bn.
On Friday, stocks closed at 289.4 percent.
THG declined to comment on the impending governance changes.
Title: Hut Group Founder Molding to Drop Gold Stocks to Restore City Confidence
Standfirst: The e-commerce group behind Cult Beauty and MyProtein must apply for premium listing in London after a disastrous week that saw it lose billions of pounds in value, Sky News has learned.