Activist investment group Kelso is looking to oust THG chairman Charles Allen, for failing to tackle the online health and beauty retailer’s low share price and structural problems.
Allen was appointed as THG chairman in March 2022 and tasked with revamping its structure and corporate governance. Kelso says it will vote against his re-election at THG’s annual meeting on June 24, given its low share price and the lack of progress in resolving its “major strategic and structural issues”.
THG, whose brands include Cult Beauty, LOOKFANTASTIC and Myprotein, floated on the London Stock Exchange in late 2020 in a deal that valued it at £5.4billion. Since they hit a peak of 837p in early January 2021, THG’s share price has nosedived, losing more than 90 percent of their value.
Kelso wants THG to move its listing from the LSE’s standard list to premium, a move that would get it entry into the FTSE 250 index and compel institutional investors to buy its shares. It also wants THG to follow through with plans to spin off its health and beauty businesses, as well as its ecommerce arm Ingenuity.
The LSE has been looking at merging its standard and premium lists for 23 months and Kelso argues that rather than waiting for it to finish, THG should switch to the premium list now. That would spur greater investor interest in the shares and boost its share price, as would finally delivering on its spin off plans after four years of promises.
Kelso believes that the lack of action on both is why THG has not had a new major investor buy its shares in the last 18 months.
