* CEO to drop golden share, shares up 8%
* THG to seek premium listing
* THG had been hit by Ingenuity uncertainty
LONDON, Oct 18 (Reuters) - THG, a British online
retailer and tech group backed by SoftBank, said on Monday it
would give up its founder's "golden share" and seek a premium
listing after its shares plummeted last week.
THG was rocked by a 35% share price collapse after an
underwhelming investor presentation, forcing it to address
corporate governance concerns more broadly.
Having delivered a bumper initial public offering last
September, it has set out plans to spin off and list different
parts of the business, prompting some investors to question the
overall strategy and value.
The move to drop the founder's special share will be closely
watched in Britain where regulators are expected to soon allow
companies with dual class share structures to access its top
tier share indices in a bid to attract more tech companies.
"After the anniversary of our 2020 listing we feel that the
time is right to make this next step and apply to the Premium
segment in 2022, thereby continuing the development of THG," CEO
Matthew Moulding said.
This means THG would be eligible for entry into the FTSE
indices and in turn see a strong ramp-up in passive and active
Shares were up 9.8% at 1004 GMT.
Reaction from the analyst community was mixed, with Citi
rating the stock a "buy" and saying the recent selloff was
"overdone" while others remained skeptical.
"This dual class structure was only ever going to last 3
years. Bringing forward the move by a year is not exactly
sweeping reform, nor is it a magic wand," said Neil Wilson,
chief market analyst for Markets.com.
"Clearly governance concerns run much deeper than a quick
bit of airbrushing can cope with," he added.
A seller of beauty and nutrition products that also runs an
e-commerce and logistics arm for partners, THG was hit by plans
to spin off its digital commerce Ingenuity division into a
Japanese venture capital giant SoftBank in May bought a
stake in THG and signed a deal that would give it the option to
inject a further $1.6 billion into Ingenuity once spun off, at a
valuation of $6.3 billion.
Investors were left confused by the maneuvering and
questioned the valuation of the parent should there be a spinoff
of Ingenuity, which hosts the lucrative beauty businesses that
THG's revenue is built on.
The stock is down 63% year to date, with an overall market
value of $4.85 billion.
THG owns beauty retailer Lookfantastic, makeup brand
Illamasqua, beauty box service Glossybox and supplements firm
Britain's Financial Conduct Authority (FCA) has proposed
allowing dual class share structures for "innovative, often
founder-led companies" for the first five years of a listing on
the LSE's premium segment.
Dual class share structures allow company founders to
maintain control at the expense of ordinary shareholders and are
popular in New York and Amsterdam, the EU's top share-trading
They are already available in London on the standard
segment, but shareholder rights groups who back "one share, one
vote" oppose their introduction on London's premium segment
where top companies list and have access to the FTSE indices.
($1 = 0.7285 pounds)
(Additional reporting by Rachel Armstrong and Abhinav
Ramnarayan; editing by Michael Holden and Jason Neely)