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THG’s board has confirmed that it received and rejected an “unsolicited, largely unfunded, highly conditional and non-binding” proposal from Selkirk to acquire Myprotein following recent speculation surrounding the potential deal.
Selkirk’s proposal ascribed a headline value to Myprotein of between £400m and £600m on a cash-free, debt-free basis.
According to THG’s statement, the majority of the consideration offered was in the form of newly-issued Selkirk shares, and the remainder of the consideration would have been payable in cash from a new equity and debt issuance, which was “largely unfunded and without appropriate detail on its source”.
As a result, THG’s board agreed that the proposal “fundamentally undervalued Myprotein and its prospects”, and in addition, carried significant execution complexity and risks.
The group said it was not confident in Selkirk’s ability to raise sufficient funding, and on this basis, the proposal was “unequivocally” rejected by the board.
As part of its statement on the matter, THG also confirmed that there has been no further engagement with Selkirk since the rejection.
Following the Ingenuity demerger on 2 January this year and its recent successful refinancing, THG has reduced its gross and net debt, secured long-term banking facilities and is focused on executing its growth and cash generation strategy.
The group’s preliminary results and first quarter trading update are expected to be announced on or around Wednesday 30 April.
