The online shopping group THG has ended an agreement under which the Japanese conglomerate SoftBank had agreed to invest in it, blaming “global macroeconomic conditions”.
The company formerly known as The Hut Group, which owns a range of internet health and beauty retailers, secured $730m (£610m) of new investment from a division of SoftBank to help fund expansion of its technology platform a few months before it listed in London.
The deal included an option to invest £900m within 15 months to take a near 20% stake in Ingenuity, THG’s online retail services division which offers packages from web hosting to delivery for brands such as Homebase, Unilever and Danone. The deal would have put a £4.5bn valuation on that division alone, which at the time made up less than 1% of THG’s turnover.
THG, which owns the online retail sites Lookfantastic, Glossybox, Zavvi and Coggles, as well as beauty brands including ESPA and Illamasqua, and the sports nutrition brand Myprotein, said on Tuesday that the deal with SoftBank had been “terminated by mutual agreement among the parties with immediate effect”.
Shares in THG fell just over 1% after the announcement, taking the total fall in the company’s shares to almost 90% since September last year. Softbank continues to own a 6.5% stake in the tech firm.
The group’s shares have long been affected by fears that SoftBank was unlikely to take up the expensive option in Ingenuity amid concerns about the division’s growth prospects. Questions about THG’s governance under billionaire co-founder Matthew Moulding have also weighed on the company.
The company’s valuation remains well below its flotation price despite hopes of a bidding war sparked by hopes of a possible offer from the property tycoon Nick Candy.
However, both Candy and another potential bidder, Belerion Capital, have both said they do not intend to make an offer for THG after initial approaches were rebuffed.
THG said last month it had received proposals from “numerous parties” in recent months but all had been rejected as “in the unanimous opinion of the board, were unacceptable and significantly undervalued the company”.
