The UK-based e-commerce company, The Hut Group (THG), has announced the details of its highly anticipated initial public offering (IPO). The company’s shares will be priced at £5 each, resulting in a market capitalisation of £5.4 billion. This IPO is particularly significant as it is the largest listing of a UK company since 2013, and its timing during the pandemic crisis adds to its newsworthiness.

To raise capital, THG is offering 374 million shares, which makes up approximately 35% of its total share count. These shares are valued at around £1.87 billion, with the IPO expected to raise £920 million. Notably, Dragoneer Investment Group has agreed to purchase £50 million worth of shares, and other investors such as BlackRock, Henderson Global, funds managed by Merian Global Investors, and the Qatar Investment Authority have committed a further £565 million. Some existing shareholders are also selling part or all of their stakes.

The listing of THG shares is set to take place on the London Stock Exchange on September 16. The strong demand for the shares reflects the rapid growth that the company has experienced in recent years. By choosing a standard listing for its IPO, THG’s founder and CEO, Matthew Moulding, can retain control and have veto power over hostile takeovers. However, if the company had opted for a premium listing, it would have been eligible for inclusion in the prestigious FTSE 100 index, given the size of the IPO.

THG’s success can be attributed to its expansion in the beauty retail sector and its strategic partnerships with external companies through its THG Ingenuity platform. In 2019 alone, the company generated revenues of £1.1 billion, marking a nearly 25% increase from the previous year. Its adjusted earnings before tax and interest exceeded £111 million. Moreover, THG’s growth has continued to surge, reporting an almost 36% rise in the first half of 2020. This makes The Hut Group one of the few winners in the current business landscape amidst the ongoing pandemic.

For more information on The Hut Group’s IPO and its impact on the retail sector, please visit:
Financial Times
BBC News