An activist shareholder for struggling THG has amped up its campaign surrounding the beauty tech company’s potential break-up plans.
Investment firm Kelso wrote to the THG board requesting a statement on its proposal to potentially de-merge its three divisions, consisting of a beauty business, nutrition subsidiary and e-commerce service platform dubbed Ingenuity.
In the letter, seen by The Times, Kelso is understood to have said that such a move could help to tackle the “inherent disparity between THG’s share price and true value”.
It continued: “Kelso continues to believe strongly that the three distinct businesses within THG are worth considerably more as separate businesses than the current market capitalisation.
“The stock market does not value diversified conglomerates, which THG is deemed to be. We do not propose to suggest the order of events, merely that it is made clear to shareholders that all options are being considered.”
The news came on the back of THG CEO Matthew Moulding securing a 3.2 percent stake in Kelso Group, making the exec the third-largest shareholder of the firm.
Kelso had initially started applying pressure on the e-commerce giant back in April, when it upped its stake in the company amid reports of “operational headwinds” and resulting lowered profit outlooks.
The firm noted that there was more THG’s board and management could do in order to ensure the share price reflected the intrinsic value of the company, adding that it would like it to deliver on commitments made to investors.