Pure Beauty

THG boss hits back at 'negative press' amid Apollo buyout offer

By Alessandro Carrara | Published: 20-Apr-2023

The preliminary takeover proposal from Apollo looks to acquire the entire share capital of THG

THG’s CEO Matthew Moulding has hit back on social media about the media’s coverage of the beauty company, in the wake of a takeover proposal from US buyout firm Apollo.

A LinkedIn post by Moulding targeted the British press, hedge funds and bank analysts, which he said “regularly build negative coverage” against UK listed companies.

He claimed this is done by the three groups to bet on which share prices will fall.

This is achieved by “discrediting” companies using aggressive claims, which aim to impact  share prices, Moulding continued.

“In simple terms, the UK market has suffered from years of ‘over-fishing’, where small groups of industry professionals come together to try and damage UK businesses, and their share prices.”

However, Moulding stated the recent media coverage achieved the opposite intended effect.

Despite posting an operating loss of £495.6m in 2022, the company saw stocks jump 45% to 93.45p per share at the start of trading on 17 April.

“A throw-away line in an otherwise typically wildly inaccurate press piece, resulted in a share price spike and an obligation to make an announcement, culminating in a c.45% increase in the share price on the day,” he added.

Moulding accompanied his rant with a video that included clips from The Wolf of Wall Street, motivational quotes from Steve Harvey and negative headlines about THG.

The video, which Moulding said was originally for internal purposes, also illustrated THG’s growth since 2004.

THG owns beauty businesses such as ESPA and Cult Beauty

THG owns beauty businesses such as ESPA and Cult Beauty

Moulding's post comes after the group received a preliminary takeover proposal from Apollo, which looked to acquire the entire share capital of the online retailer.

The private equity firm has until 15 May 2023 to announce a firm offer for the owner of Cult Beauty or pull out of the deal.

THG stressed that there is “no certainty” a firm offer will be made, and will make further announcements “if and when appropriate”.

The Manchester-based company also ended 2022 with a 2.7% sales rise to £2.2bn.

This was supported by a strong performance from the UK market, which generated sales in excess of the expected group growth rate.

The group’s core divisions – THG Beauty, THG Nutrition and THG Ingenuity – also saw strong growth with a combined 4.1% rise in revenues.

"We are nearing completion of a three-year major infrastructure investment programme,” said Moulding on the financial update.

“While this has inevitably involved significant investment and transition costs, the less than two-year return on investment is pleasing.

“The global capability it now provides gives us increased confidence in our ability to continue to capture market share whilst accelerating both profitability and free cash flow generation."

Despite the uplift in sales for 2022, THG reported an 8.6% decline in sales for its first quarter of trading in 2023.

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