(Bloomberg) — A consortium backed by e-commerce investor Belerion Capital has decided to drop its pursuit of embattled UK online shopping emporium THG Plc.
The investor group, which also includes hedge fund King Street Capital Management, “does not intend to make an offer for the company,” it said in a statement Thursday, confirming an earlier report by Bloomberg News.
Manchester-based THG last month rejected a bid from the consortium valuing the firm at £2.1 billion ($2.5 billion), saying the offer of 170 pence per share “significantly undervalued the company.” The Belerion consortium had until 5 p.m.
Thursday to announce whether it would make a formal bid or walk away.
THG also drew interest from property entrepreneur Nick Candy who has the same deadline as Belerion to “put up or shut up” and declare its intentions.
Takeover speculation has swirled around THG since November when founder Matthew Moulding said he regretted floating the company and hinted he may take the business private again.
Formerly known as the Hut Group, Moulding started the business in 2004 with John Gallemore, who now serves as chief financial officer.
It began selling CDs but today operates hundreds of websites selling beauty, skincare and health-food products as well as helping rivals sell online via the Ingenuity division.
THG was a stock market darling when it floated, attracting investment from SoftBank Group Corp., but has since been dogged with concerns about its governance and the growth prospects of Ingenuity.
Moulding has also kept a tight grip on THG as a major shareholder, landlord, chairman and chief executive officer.
In March, THG appointed Charles Allen as chairman, with Moulding relinquishing the role to focus on being CEO. Moulding also pledged to give up his golden share, which allows him to veto a takeover, smoothing the way for THG to move its listing to the premium segment of London’s Stock Exchange.
THG said in a statement Thursday that all recent approaches have been unsolicited and significantly undervalued the company.
“While THG is clearly aware of the macro-economic challenges, the company continues to perform well, and in line with its own expectations,” it said.
Belerion is an investment advisory firm that specializes in e-commerce investments and was founded by Iain McDonald, who is currently a non-executive director on THG’s board.
Candy is best known for working alongside his brother Christian in driving the development of the One Hyde Park luxury residential development in London’s exclusive Knightsbridge district.
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