THG PLC (LSE:THG) shares enjoyed a bounce on Tuesday after it was revealed that the online retailer and protein shakes maker had a new investor in the form of Kelso Group Holdings PLC (LSE:KLSO).
Kelso will have been a new name to most investors, as it only just floated on the market and THG was its first investment.
On its website the investment company says its mission is 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".
This makes it an activist investor – a newer, smaller rival to the likes of Carl Icahn, Paul Singer’s Elliott Management, Cevian Capital, Coast Capital, Sherborne Investors, Bluebell Capital Partners and Third Point.
Kelso was admitted to the London Stock Exchange’s main market earlier this month, with a £3mln fundraising at a price of 2p per share.
But it is actually just a new name and new business model for Insight Business Support PLC, an existing London-listed cash shell company that was formed in 2018 but failed to find a target.
In November, IBSU appointed Zeus as broker and changed to its current activist course.
Some of Kelso’s directors may be better known to investors.
It is led by John Goold as chief executive, formerly in the same role at Zeus for over eight years up until 2021, and before that head of equities at another small-cap broker, Arden Partners (AIM:ARDN), and corporate finance director at the broking arm of Anglo-South African giant Old Mutual.
In the chairman’s seat is legal eagle Sir Nigel Knowles, in a non-executive capacity. Currently the CEO of listed law firm DWF Group, formerly in top roles for over four decades at DLA Piper.
Chief investment officer Jamie Brooke, former lead fund manager of the Hanover Catalyst Fund and the Volantis small cap investment team.
Brooke, who through those roles has been director on over 20 company boards, as well as having earlier experience at 3i and Quester in private equity.
In a statement announcing its £2.7mln stake in THG, Kelso gives a strong suggestion about what sort of “trapped value” it hopes to unlock, flagging that the separation of THG into its three main divisions “provides THG with significant strategic optionality” and “could provide THG shareholders with significant upside”.
Kelso said it believes THG’s Nutrition business, which includes the MyProtein and MyVegan brands, “could alone be worth in excess of the entire current market capitalisation of THG”.
THG has seen its valuation plunge from £5.4bn at IPO in 2020 to below £800mln, with founder Matthew Moulding having described the experience of listing as having “just sucked from start to finish”.