The Hut Group (THG), a rapidly-growing company in health and beauty, announced that it will be reorganizing its corporate governance. This was after the share price crash last week.
The “golden shares” which allowed Matthew Moulding to have control over acquisitions and takeovers are being removed.
THG, which is the owner of Lookfantastic, was also prevented from joining the FTSE 100 according to UK listing rules.
THG shares, which are backed by Japan’s Softbank, plunged 35% last week due to investor worries about its structure.
On Monday, the company, which listed on the stock market in September last year with a valuation of £5.4bn, promised to address corporate governance worries, which had stopped many blue chip investors from buying shares in the company.
THG stated that it will also cancel Mr Moulding’s share rights and conduct a review on its corporate governance.
According to media reports, the company must find an experienced non executive chairman. Mr Moulding currently serves both as chief executive and executive chair.
Moulding explained that after the 2020 anniversary we felt it was time to apply for premium segments in 2022. This would allow THG to develop further and continue its development. We are committed to delivering our strategy for our employees, shareholders and key stakeholders.
THG executive held a regular meeting with shareholders on Tuesday. At the meeting, Mr Moulding updated shareholders about Ingenuity and its software. These prospects were behind THG’s recent share price increase. Ingenuity is a technology seller to online retailers.
But after the meeting, THG shares collapsed, initially wiping about £2bn off the company’s market value. Analysts were dissatisfied with Ingenuity’s achievements, according to reports.
On Wednesday, however, THG issued the following statement: “THG noted the drop in the share price yesterday, after the capital markets event. It confirms that there is no reason that can be attributed to the material price movement and no new material was provided at the event.”
SoftBank, the Japanese investor, signed a deal last May that allowed it to purchase a fifth stake in Ingenuity if THG decides not to sell it. The agreement valued Ingenuity at £4.5bn.
Share Your Comment Below