THG and SoftBank scrap options for $1.6bn investment in e-commerce emporium
E-commerce giant THG has cancelled its partnership with a division of SoftBank, citing “global macroeconomic conditions.”
A call option with the Japanese conglomerate to pump an extra $1.6bn into technology unit THG Ingenuity has been scrapped and will “cease to be capable” of being exercised.
An option and collaboration agreement was terminated by mutual agreement with immediate effect, an announcement made on the London Stock Exchange on Tuesday morning revealed.
The plan would have seen SoftBank take a stake worth almost 20 per cent in the division, around $730m, after its SB Management division announced the option in May 2021.
THG Ingenuity was valued at $6.3bn last spring.
The Cult Beauty owner said it had completed an international separation of key divisions, which would provide”flexibility to enter into future strategic partnerships to generate value accretion for its stakeholders”.
THG’s share price dipped one per cent following the announcement on Tuesday morning, however it was boosted slightly in later trading.
Its shares have taken a battering in the past year, sinking 87.8 per cent.
Earlier this summer, THG rejected all recent approaches for the e-commerce beauty firm, stating the proposals had “significantly undervalued” the firm.
Matthew Moulding’s retail emporium had received indicative proposals from “numerous parties” in recent months, it had confirmed in its full year results earlier this year.
It also rejected an indicative non-binding proposal from a consortium led by Belerion Capital Group Limited and King Street Capital Management.
Property tycoon Nick Candy’s Candy Ventures also announced it had pulled out of the running for a THG takeover.
In an update on the London Stock Exchange, Candy Ventures said it did not intend to make an offer, despite previously stating it was in the “very early stages” of mulling a possible bid.