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  • Writer's pictureMark Watson-Mitchell

THG – Will There Be Fireworks To Come At The THG AGM?

In an event something like the one said to have taken place between David and Goliath, the AGM of THG (LON:THG), due to be held on Monday 24th June, could well turn out be an interesting meeting.


Activist investor Kelso Group Holdings (LON:KGHP) has declared its objections to the way that Charles Allen, Chairman of the THG online beauty and nutritions group, has been somewhat ineffective in his role.


THG - Democratising Online Retail


The Altrincham, Cheshire-based, loss-making THG declares itself as a global digital innovator involved in revolutionising how brands connect to a worldwide consumer base, transforming how consumer brands go to market in the digital age.


The company operates three distinct businesses in Beauty, Nutrition and Ingenuity, each scaled from the UK to hold global leading positions in their respective sectors.

With its shares trading at 69p, the group is capitalised at £920m.


Kelso Group – Activist Investor


Kelso looks to identify, engage and unlock trapped value in UK listed companies.


Through active engagement and alignment with other stakeholders, taking stakes directly, Kelso aims to effect change where existing shareholders are often unable or unwilling to do so themselves.


That is just what it is planning to do at the forthcoming AGM.


With its shares trading at 3.25p, the company is valued at only £12.2m.


The company’s largest holding is THG, which it believes trades at a significant discount to its ‘sum of parts’ value, emphasising its Nutrition and its Beauty sides as being undervalued.


The Kelso Gripe


The company intends to vote against THG’s AGM Resolution 5, which concerns the re-election of its Chairman Charles Allen, former Chair of Granada Media, ITV, Endemol, EMI Music, Tesco, Virgin Media and The British Red Cross.


Kelso believes that value for THG’s shareholders would be significantly enhanced if THG were to fulfil its commitment to move to the Premium List from its current standing on the Standard List, which was promised by the company way back in October 2021, as well as providing clarification of the THG future structure.


Kelso, which has a 0.55% stake in THG, has been seeking support in its actions from other THG shareholders.


Already one of the THG holders, the Dutch investment firm with a 1.89% holding, Ophorst Van Marwijk Kooy Vermogensbeheer, has sided with Kelso in its attempt to help create better value.


OVMKV also happens to be a shareholder in Kelso.


Oliver Cookson, who was the founder of the THG Myprotein business, has followed suit for his 1.60% holding.


Biter Bit?


The boss of THG, Matt Moulding, has been using something of a ‘PacMan’ manoeuvre, by gradually buying into the Kelso equity in a personal investment move and now holds 10.01% of the activist company’s equity.


A Lively AGM?



Kicking off at 2pm on Monday 24th June the THG AGM being held in Altrincham could prove to be a somewhat lively affair, especially if Kelso Group gets its way in trying to be heard and then helping to shake up the value of THG’s shares.

 

 

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