TIDMTHG
RNS Number : 1809Z
THG PLC
12 May 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON
TAKEOVERS AND MERGERS (THE "CODE"). THERE CAN BE NO CERTAINTY THAT
ANY OFFER WILL BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
12 May 2023
THG PLC
("THG" or the "Company")
Termination of discussions with Apollo
On 17 April 2023, THG announced that it was in receipt of a
highly preliminary and non-binding indicative proposal from Apollo
Global Management Inc. ("Apollo") on behalf of certain of its
affiliated funds, to acquire the entire issued and to be issued
share capital of THG (the "Indicative Proposal"). Following receipt
of the Indicative Proposal, the Board of THG entered into a short
period of discussion with Apollo to provide it with an opportunity
to improve the proposed valuation and confirm the structure of its
Indicative Proposal. It has become clear to the Board, supported by
shareholders representing a majority of THG's issued share capital,
that there is no longer any merit in continuing to engage with
Apollo. Consideration and rejection of the Indicative Proposal has
been on a basis consistent with all previous offers for the
Company, some a matter of public record, which were also rejected
based upon inadequate valuations and the nature of those offer
structures. Having discussed with its financial and legal advisors,
the Board has unanimously determined that it is not in the best
interest of THG shareholders to seek an extension to the deadline
set out in the Company's announcement dated 17 April 2023, as
permitted by Rule 2.6(c) of the Code, and, consequently, it has
terminated all discussions with Apollo.
The Company confirms that the profitability and cashflow
improvements delivered during the first quarter of FY 2023, have
continued in Q2, along with ongoing online sales momentum further
supporting the Board's full year guidance. The actions undertaken
by management since the beginning of 2022 to improve operating
leverage, reduce capex and generate working capital efficiencies,
coupled with ongoing deflation in whey commodity prices, underpin
significantly improved profitability and cash flow neutrality in FY
2023. The Company reiterates its expectations to deliver positive
free cash flow in FY 2024 and adjusted EBITDA margins of around
9.0% over the medium term.
Since Lord Allen's appointment as independent Chair in March
2022, the composition of the Company's Board continues to progress
in accordance with its independence and diversity objectives, with
three further independent non-executive Directors appointed,
including the recent appointment of Sue Farr as Senior Independent
Director. Following completion of the divisional reorganisation and
subsequent strategic review, including publication of segmental
performance, the Group now has a full range of strategic options to
maximise shareholder value across the Nutrition, Beauty and
Ingenuity divisions. The timing of the move to the Premium segment
of the Main Market of the London Stock Exchange remains subject to
the outcome of the FCA's review for reform of the listing
regime.
Commenting on today's announcement, Charles Allen, Lord Allen of
Kensington, Chair of THG said:
"THG's Board, in accordance with its fiduciary obligations and
as demonstrated with its recent engagement with Apollo, will always
give due consideration to all potential options which provide the
opportunity to maximise value to THG's shareholders. The Board
remains fully confident in THG's strategic direction and long-term
prospects as an independent company. As stated in our recent
results, with a strong balance sheet and category leading positions
within substantial global end markets that continue to benefit from
long-term structural growth, we have confidence in our ability to
deliver long-term value for shareholders and remain on track to be
cashflow positive in 2024."
As stated in the announcement dated 17 April 2023 and in
accordance with Rule 2.6(a) of the Code, Apollo is required, by not
later than 5.00 p.m. (London time) on 15 May 2023, to do one of the
following: (i) announce a firm intention to make an offer for THG
in accordance with Rule 2.7 of the Code; or (ii) announce that it
does not intend to make an offer for THG, in which case the
announcement will be treated as a statement to which Rule 2.8 of
the Code applies.
The person responsible for arranging for the release of this
announcement on behalf of THG is James Pochin, General Counsel and
Company Secretary.
For further information, please contact:
Jefferies International Limited Tel: +44 (0) 20 7029
Philip Noblet / Ed Matthews / Paul Bundred 8000
/ Gavriel Lambert / Thomas Bective
Barclays Bank PLC Tel: +44 (0) 20 7623
Alastair Blackman / Nicola Tennent / 2323
Callum West
Citigroup Global Markets Limited Tel: +44 (0) 20 7986
Michael Lavelle / Yishai Fransis / Sian 4000
Evans / Robert Farrington
Investor enquiries - THG PLC i nvestor.relations@thg.com
Greg Feehely, SVP Investor Relations
Kate Grimoldby, Director of Investor
Relations and Strategic Projects
Media enquiries Tel: +44 (0) 20 7250
Powerscourt - Financial PR adviser 1446
Victoria Palmer-Moore / Nick Dibden thg@powerscourt-group.com
/ Nick Hayns
THG PLC v iki.tahmasebi@thg.com
Viki Tahmasebi
S
Notes to editors
THG is a vertically integrated, digital-first consumer brands
group, retailing its own brands in beauty and nutrition, plus
third-party brands, via its complete digital commerce solution,
Ingenuity, to an online and global customer base. THG's business is
operated through the following divisions:
THG Beauty: The globally pre-eminent digital-first brand owner,
retailer, and manufacturer in the prestige beauty market, combining
its prestige portfolio of eight owned brands across skincare,
haircare, and cosmetics. It is a global route to market for over
1,300 third-party premium brands through its portfolio of websites,
including Lookfantastic, Dermstore, Cult Beauty and Mankind and the
beauty subscription box brand GLOSSYBOX.
THG Nutrition: A group of digital-first Nutrition brands, which
includes the world's largest online sports nutrition brand
Myprotein, and its family of brands (Myvegan, Myvitamins, MP
Activewear and MyPRO), with a vertically-integrated business model,
supported by global THG production facilities.
THG Ingenuity: Ingenuity provides a complete digital commerce
solution for consumer brand owners across its three pillars of
technology, digital and operations. Being part of the THG group, a
global digital brand owner in Beauty & Nutrition, Ingenuity is
uniquely placed to bring relevant, practical, and international
expertise in every area of commerce.
Rule 26.1 disclosure
In accordance with Rule 26.1 of the Code, a copy of this
announcement will be available (subject to certain restrictions
relating to persons resident in restricted jurisdictions) at
www.THG.com by no later than 12 noon (London time) on the business
day following the date of this announcement. The content of the
website referred to in this announcement is not incorporated into
and does not form part of this announcement.
Important notice
Jefferies International Limited ("Jefferies"), which is
authorised and regulated by the Financial Conduct Authority ("FCA")
in the United Kingdom, is acting exclusively for THG and no one
else in connection with the Indicative Proposal and will not be
responsible to anyone other than THG for providing the protections
afforded to clients of Jefferies nor for providing advice in
relation to the Indicative Proposal or any other matters referred
to in this announcement. Neither Jefferies nor any of its
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of Jefferies in connection with this announcement, any statement
contained herein or otherwise.
Barclays Bank PLC, acting through its Investment Bank
("Barclays"), which is authorised by the Prudential Regulation
Authority ("PRA") and regulated in the United Kingdom by the FCA
and the PRA, is acting exclusively for THG and no one else in
connection with the Indicative Proposal and will not be responsible
to anyone other than THG for providing the protections afforded to
clients of Barclays nor for providing advice in relation to a
possible offer or any other matter referred to in this
announcement.
Citigroup Global Markets Limited ("Citi"), which is authorised
by the PRA and regulated in the UK by the FCA and the PRA, is
acting as financial adviser for THG and for no one else in
connection with the matters described in this announcement, the
Indicative Proposal and will not be responsible to anyone other
than THG for providing the protections afforded to clients of Citi
nor for providing advice in connection with the Indicative
Proposal, or any other matters referred to in this announcement.
Neither Citi nor any of its affiliates, directors or employees owes
or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, consequential, whether in contract, in
tort, in delict, under statute or otherwise) to any person who is
not a client of Citi in connection with this announcement, any
statement contained herein, the Indicative Proposal or
otherwise.
This announcement is not intended to, and does not, constitute,
represent or form part of any offer, invitation or the solicitation
of an offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities, or the solicitation of any
vote or approval in any jurisdiction, whether pursuant to this
announcement or otherwise. Any offer, if made, will be made solely
by certain offer documentation which will contain the full terms
and conditions of any offer, including details of how it may be
accepted.
This announcement has been prepared in accordance with English
law and the Code, and information disclosed may not be the same as
that which would have been prepared in accordance with laws outside
of the United Kingdom. The release, publication or distribution of
this announcement in jurisdictions other than the United Kingdom
and the availability of any offer, if made, to shareholders of the
Company who are not resident in the United Kingdom may be affected
by the laws of relevant jurisdictions. Therefore, any persons who
are subject to the laws of any jurisdiction other than the United
Kingdom or shareholders of the Company who are not resident in the
United Kingdom will need to inform themselves about, and observe
any applicable requirements. Any failure to comply with such
requirements may constitute a violation of the securities law of
any such jurisdiction.
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END
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