THG founder relinquishes 'golden share', aims to halt share price fall
As it reels from a plummeting share price, THG (which used to be known as The Hut Group) said on Monday that its founder is cancelling his Special Share rights. The business also confirmed it would apply to list on the Premium Segment of the Main Market of the London Stock Exchange next year.
CEO and executive chairman Matthew Moulding said that “in furtherance of good corporate governance” his Special Share rights that gave him an extra level of control will end. Those rights had, for instance, given him the ability to block a hostile takeover even if all other shareholders were in favour.
The firm’s corporate governance had been in the spotlight since it listed a little over a year ago with that Special Share — and the fact that Moulding holds the two senior roles — seen as being against good corporate governance.
The company hadn't seemed too worried about criticism on this front in the past and its previously buoyant share price seemed to justify that stance. But a recent capital markets day designed to get investors on board after its share price had started falling actually had the opposite effect and the share price plunged.
The cancellation of the Special Share will facilitate the group's application to step up to the Premium segment of the Main Market in 2022. This would be significant for its investors as it would give them the opportunity to vote on any future material acquisitions. It would also bring other benefits and would allow THG to gain UK FTSE indexation.
And the company added that while it “currently complies with many aspects of the UK Corporate Governance Code published by the Financial Reporting Council, THG's board intends to undertake a further review of its corporate governance arrangements in conjunction with its application to step-up to a Premium Listing”.
Moulding said of all this: "After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the Premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees.”
Despite the firm’s shares being down almost 30% in the last five days, they rose over 3% early on Monday after the news was announced.
Copyright © 2022 FashionNetwork.com All rights reserved.