(Alliance News) - THG PLC on Monday confirmed its founder will give up his so-called 'golden share', clearing away a corporate governance issue that has troubled investors and opening up the possibility of joining FTSE indices.
The Manchester-based online retail platform - better known as the Hut Group - is looking to rebuild investor confidence, after a disastrous capital markets day early last week resulted in a 34% share price slide and left analysts with more questions than answers.
Founder & Chief Executive Officer Matthew Moulding, "in furtherance of good corporate governance", plans to give up his golden share, THG said on Monday.
The special share allows Moulding to veto any takeover bid for three years. It has been unpopular with investors and prevents THG from joining the FTSE 100 or FTSE 250 despite a market capitalisation of GBP3.81 billion.
THG would be shoe-in for inclusion in the mid-cap index. The smallest FTSE 250 stock is Restaurant Group PLC with an equity value of GBP680.9 million. The FTSE 100 would be more of a stretch. The smallest FTSE 100 stock is broadcaster ITV PLC, with a GBP4.16 billion market cap, though THG was valued higher than that before its recent share tumble.
THG shares were up 8.7% at 314.62 pence early Monday.
"This cancellation will facilitate the group's application to step-up to the premium segment of the Main Market of the London Stock Exchange in 2022," THG explained. "A premium listing will permit THG to gain UK FTSE indexation."
Citing City sources, Sky News had reported on Sunday that THG was to announce plans to remove the special share rights.
Moulding added on Monday: "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."
By Tom Waite; thomaslwaite@alliancenews.com
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