British e-commerce firm THG to launch Ingenuity technology platform

A British e-commerce firm THG said Tuesday that it wants to spin off its technology platform, Ingenuity, in favor of founder Matthew Moulding’s vision to build a major publicly listed technology brand in the UK.

THG, formerly known as The Hut Group, said in an investor presentation on Tuesday that it is “continuing to conduct a comprehensive assessment of potential properties to facilitate the liquidation of THG Ingenuity .”

“At this stage no certainty can be given as to the timing of the reduction as we consider options to achieve this outcome, however, tax planning permission has now been received by HMRC,” it said. UK tax collector, THG.

Any proposed merger will require shareholder approval, and it adds that more information about its proposed winding up will be provided to shareholders in due course.

If and when the demerger is approved, the THG group company will consist of only its THG Beauty and THG Nutrition divisions. The company believes that this will simplify its structure and help investors better understand the business.

Shares of THG were down 10% during morning trading on Tuesday.

THG founded THG Ingenuity in 2021 as a separate business to sell e-commerce solutions for retailers. THG’s Molding previously described THG Ingenuity as an “inspiring social media platform” to promote products, including products sold by THG as well as those sold by other companies.

The business was established with the help of Japanese technology investment SoftBankwhich in May 2021 bought an 8% stake in THG for 481 million. The agreement at the time gave SoftBank the option to invest an additional $ 1.6 billion in THG Ingenuity.

However, in October 2022, SoftBank terminated its investment partnership with THG and sold its entire stake in the company to Molding.

In addition to retaining the operations of its Intelligence arm, THG plans to transfer all of its currently traded shares to the newly formed equity share trading companies (ESCC) of the London Stock Exchange. Exchange.

Previously, THG was listed on the common section of the LSE. However, firms listed in this category of stock exchange are not eligible to be considered for inclusion in major blue-chip stock indexes, such as the FTSE 100.

After tech executives and investors bemoaned the nature of London’s IPO market, officials within the LSE, the UK government and the Financial Conduct Authority worked together to change the rules. of the London listing and make the exchange an attractive destination for advanced technology firms.

Earlier this year, the FCA introduced the ESCC, among other changes, as part of wider changes to the British banking environment.

THG said the firm’s new online presence will increase its chances of being picked up for inclusion in UK stock indexes, and in turn, will improve passive investment flows and profits. of the company’s shares.

THG has struggled to return its share value to the highs of the monster tech rally of 2020 and 2021, as investors poured money into the business benefiting from stay-at-home trends and a broader shift in the economy. long online shopping.

The shares hit an intraday all-time high of £800 a share in December 2020.

Today, they trade at £57.65, a fraction of the value they had at the height of the Covid-driven boom in tech and e-commerce stocks.

Keeping up with the firm’s struggles with the market, Molding has been a prominent analyst of the London market for tech listings, telling GQ Magazine in 2021 that THG’s IPO was “absorbed from start to finish” and in the end it was “wrong.”

He also said that at that time it would have been better to float THG in the US instead of the UK