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Belerion Capital has announced it has ended its £2bn pursuit of THG, with the online retail giant confirming it has rejected all recent approaches from potential suitors.
Belerion – founded by THG non-executive Iain McDonald – supported by King Street Capital Management, made an unsolicited preliminary offer of 170p a share in mid-May.
The offer was rejected by THG, with the consortium having until a deadline of today to make a formal offer under takeover rules once THG made the bid public on 19 May.
Belerion said today it “does not intend to make an offer for the company”.
The groups are now restricted from making an offer for THG for the next six months either without the agreement of the THG board, where a rival offer has been made or if the Takeover Panel believe there to have been a “material change of circumstances”.
THG said this morning that all recent approaches for the group have been unsolicited, and unacceptable as they significantly undervalued the company.
“After consulting with THG’s major shareholders and taking advice from the Company’s advisors, the Board has not considered it appropriate to provide due diligence access to any of these parties,” it said.
Therefore, it said it is not appropriate to seek an extension to the deadline for Belerion to make a firm offer.
“While THG is clearly aware of the macro-economic challenges, the company continues to perform well, and in line with its own expectations,” it said.
THG shares have plunged 14% on the news back to 90.2p.
Morning update
NWF Group, the specialist distributor of fuel, food and feed across the UK, has updated the market on its “record year” amid soaring prices.
For the year ended 31 May the group delivered a materially stronger performance than had been expected at the beginning of the financial year.
It posted “outstanding performance” in fuels, which benefitted from very significant short-term volatility in oil prices and periods when the UK market was supply constrained. The teams in the group’s 25 depots have focused on maintaining service to existing customers which at times has involved trunking fuel across the country to meet regional shortfalls and adapting pricing strategies to mitigate exposure to the challenging commodity price fluctuations.
Food also saw a strong performance across the year with warehouses at an effective operating capacity, and the achievement of significant efficiency improvements. The business has also been successful at passing on inflationary costs by working closely with customers and maintaining high service levels.
Feeds saw a good recovery in performance in the second half with the business effectively managing the commodity market price increases and volatility, particularly in the final quarter. Positively, increases in milk prices have been implemented to ensure farmers are incentivised to produce milk despite having higher energy, fertiliser, and feed price inputs.
It said these results demonstrate both the resilience of the group and its ability to deliver a good financial performance in volatile market conditions.
Cash generation has remained strong and the group was cash positive at the year-end, compared to reporting net debt last year.
CEO Richard Whiting commented: “”We have delivered a record result driven by high levels of service provided to customers across the Group. The outperformance is principally attributed to the Fuels division where there were both fuel availability issues and significant price volatility.
“Our depot-based operating model has again proved robust in providing service to local customers, whilst utilising our national supply agreements to ensure we maintain deliveries to all our customers. We entered the new financial year in good shape with strategic progress continuing and a more stable operating environment for the Fuels Division.”
On the markets this morning, the FTSE 100 is back down 1.6% to 7,156.7pts after yesterday’s slight recovery.
Other than THG, fallers include Just Eat Takeaway.com, down 5.4% to 1,441.2p, Deliveroo, down 4.7% to 82.5p and FeverTree, down 4.3% to 1,394p.
Risers include Hotel Chocolat, up 2.8% to 292p and Finsbury Food Group, up 1.7% to 71.7p.
Yesterday in the City
The FTSE 100 rebounded 1.2% to 7,273.4pts yesterday, ending a run of six consecutive days of losses.
WH Smith was one of the market’s major risers, climbing 8.5% to 1,474p after WH Smith has surpassed its 2019 sales for the first time since the start of the pandemic as the travel division recovery gathers momentum.
Other risers included Deliveroo, up 7% to 86.6p, FeverTree, up 6.7% to 1,456p, Ocado, up 6.7% to 837.4p, Cranswick, up 5.8% to 3,86p, Coca-Cola HBC, up 5.5% to 1,765.5p, C&C Group, up 4.5% to 197p, B&M European Value Retail, up 4.3% to 376.7p, Pets at Home, up 4% to 321.4p and Britvic, up 3.7% to 816p.
The day’s few fallers included McBride, down 10.9% to 26.3p, Bakkavor, down 5.2% to 91.6p, Hotel Chocolat, down 2.9% to 284p, Science in Sport, down 1.9% to 53p and PayPoint, down 1.7% to 572p.
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