Kelso ramps up THG break-up campaign

Activist THG shareholder Kelso has reportedly ramped up its campaign for THG to confirm its plans to diverge the three arms of its business, according to The Times.

Kelso has written to THG’s board of directors to request a stock market statement containing the proposals relating to the de-merging of the divisions.

THG runs a beauty business, a nutrition arm and an ecommerce services platform, Ingenuity.

In the letter Kelso stated that de-merging the divisions would help to address “the inherent disparity between THG’s share price and true value”.

Kelso said in the letter: “Kelso continues to believe strongly that the three distinct businesses within THG are worth considerably more as separate businesses than the current market capitalisation.

“The stock market does not value diversified conglomerates, which THG is deemed to be. We do not propose to suggest the order of events, merely that it is made clear to shareholders that all options are being considered. Such an announcement would, in our view, help to close the valuation gap and so enhance the ability to achieve the true value in any of the de-merger options.”

THG has yet to confirm whether it will split up its three divisions into separate entities.

The news comes after THG founder Matthew Moulding took a 3.2% stake in Kelso Group last month.

Moulding is said to have made an investment of around £300,000 in the private equity firm.

Kelso was launched in 2022 with the backing of a number of high net worth individuals with the idea of tracking and investing in undervalued listed businesses. In January 2023 it successfully raised £3m through contributions from approximately 20 UK entrepreneurs.

Retail Sector has contacted THG and Kelso for comment.