THG PLC (LSE:THG) has attracted investment from activist investors Kelso Group Holdings PLC (LSE:KLSO), which said the owner of The Hut Group was a “hugely exciting but significantly undervalued business”.
The £2.7mln purchase of THG shares at an average price of 54.5p, representing 0.4% of the group, is the first investment for Kelso, which floated in London with £3mln of new cash earlier this month.
Kelso, which on its website promises to "identify, engage and unlock trapped value in UK-listed companies" and "effect change where existing shareholders are often unable or unwilling to do so themselves".
THG's separation of its main divisions “provides THG with significant strategic optionality” and “could provide THG shareholders with significant upside”, Kelso said, as it believes that the current stock market value does not reflect the underlying value of each of the divisions.
In particular, Kelso said it believes the Nutrition business, which includes the MyProtein and MyVegan brands of vitamins, minerals, high-protein snacks and drinks, “could alone be worth in excess of the entire current market capitalisation of THG”.
THG was listed in London in September 2020 with a market capitalisation of £5.4bn at the initial public offer price of 500p, but has seen its shares plummet as low as 31.15p late last year.
The shares continued their recent revival on Tuesday, up 4.7% to 57.02p.