THG shares plunge to record low as BlackRock halves stake
Owner of Lookfantastic and Cult Beauty has been under fire over corporate governance
Last modified on Tue 2 Nov 2021 06.01 EDT
Shares in the Hut Group hit an all-time low on Tuesday after it emerged that BlackRock is halving its stake in the online retailer after a rocky month for the company.
BlackRock, its largest institutional shareholder, is selling 58m shares priced at 195p each, or a 10.3% discount to the stock’s Monday close. The deal is valued at £113.1m. The world’s biggest fund manager had a 10.1% stake, or nearly 124m shares, in mid-October according to Refinitiv data.
Shares in the Manchester-based THG, which runs websites including Lookfantastic and Cult Beauty, fell to a record low of 198p in early trading, and were later down 6% at 204p.
THG shares have slumped in recent days because of concerns about the firm’s governance and the future of the business, after it flagged last week that profit margins would be squeezed by currency changes. Analysts have also pointed to a slowdown in growth at its core beauty division.
The company which is run by its co-founder and biggest shareholder Matt Moulding, has tried to calm investor nerves by hiring headhunter Russell Reynolds to search for a new non-executive chair. Moulding is currently executive chairman and chief executive, which is against best practice according to the corporate governance code.
THG said the appointment of a new chair would help it prepare for a listing on the main London Stock Exchange. It floated on the junior market just over a year ago.
Last week THG also appointed an executive from its Japanese backer SoftBank, Andreas Hansson, as a non-executive director to its board, to dispel any doubts about its relationship with SoftBank, which invested $730m (£530m) in THG this year.
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