THG boss should count the blessings of life as a listed company
Matt Moulding and the board of THG did the easy bit last week: they rejected a “highly preliminary” takeover proposal from a consortium led by one of the online retailer’s own non-executive directors. It will have been a simple decision, because rolling over at 170p a share, or £2.1bn, would be humiliating. Even some of the bears who used to get stuck into THG in the days of a 600p-plus share price thought fair value for this baffling group might lie around the 175p level.
What, though, would Moulding do if a serious bid – which a few in the City define as one around 250p a share – were to turn up? Such a plotline looks unlikely (as the current share price of 139p indicates), but the working assumption is that he’d be tempted by the idea of going private. He spoke of “options” in the infamous interview with GQ magazine last year in which he said listing in London “sucked from start to finish”.
If so, Moulding should remember that the grass is not always greener elsewhere. If the private route were intended as an excursion on the way to a US listing, he should note that American markets – the ones he eyed enviously – have subsequently clobbered the value of almost every “pre-profit” tech stock.
Second, going public in London hasn’t been so awful for THG, all things considered; the company raised £920m of fresh equity at listing in 2020 and then another £800m exactly a year ago via a placing that brought in SoftBank and investment firm Sofina. The public markets, in other words, set up him with the resources to prove there’s a real long-term business within THG.
Third, if he doesn’t like the wicked short-sellers found in public markets, a return to private ownership may not be a picnic either. Yes, THG inhabited that private
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