THG surges after rejecting buyout bid, attracting more interest

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Signage is seen on a THG warehouse building in Manchester, Britain, January 18, 2022. REUTERS/Phil Noble

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May 20 (Reuters) - THG's shares (THG.L) soared 31% on Friday after the British e-commerce group rejected a 2.1 billion pound ($2.62 billion) buyout proposal from two investment firms and attracted interest from entrepreneur Nick Candy.

The owner of Myprotein supplements late on Thursday rebuffed an offer of 170 pence per share from Belerion Capital and King Street Capital Management, saying it undervalued the company. The proposal represented a premium of 46% to its last close.

THG also drew interest from Candy, whose investment vehicle announced plans to make a possible offer for the company. The British property mogul was recently part of a consortium that was interested in acquiring English football club Chelsea.

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THG has become a takeover target in recent months after losing over two-thirds of its market value since debuting on the London Stock Exchange in 2020. Marquee investors such as BlackRock Inc (BLK.N) have offloaded their stakes in the company at steep discounts due to worries about governance and growth.

The flurry of interest reflects a "highly undervalued" stock, said Liberum analyst Wayne Brown, adding the company's beauty, nutrition and e-commerce tech businesses could make at least 2 billion pounds in combined sales this year.

"A bidder could take the company private and look to later relist in the U.S., where such tech companies receive much greater appreciation from investors," Brown said.

THG founder and Chief Executive Matthew Moulding announced last month he had rejected "numerous bids". He had sparked speculation of a take-private deal last year by saying he regretted taking the company public. read more

Moulding holds a special voting share in the company that allows him to veto offers.

($1 = 0.8018 pounds)

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Reporting by Muhammed Husain in Bengaluru; Editing by Aditya Soni

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