THG and Softbank scrap $1.6bn investment deal

No comments

A call option agreement for a division of Japanese investment titan Softbank to acquire a $1.6bn (£1.3bn) stake in THG’s Ingenuity division has been terminated.

THG, formerly known as The Hut Group, said the share option agreement, which would have allowed one of Softbank’s subsidiaries to acquire a 20% stake in THG’s technology and logistics arm Ingenuity, has been “terminated by mutual agreement”.

THG cited “global macroeconomic conditions” as the driving force behind the termination of the call option, which was first announced in May 2021.

At the time, the deal valued Ingenuity, which provides ecommerce infrastructure for businesses including Homebase, Nestlé and Procter & Gamble, at over $6bn ($5bn).

Since then, THG’s overall value has plummeted from £5.4bn in September 2020 to £830m as the City raised questions over the group’s corporate governance and the prospects for Ingenuity.

Notable shareholder BlackRock slashed its stake in the business by half last year.

Softbank remains a shareholder in THG with a stake of approximately 7% and collaboration between the ecommerce firm and several companies in Softbank’s portfolio, such as Norwegian warehouse automation business Autostore, is ongoing.

THG has also completed the 15-month process of internally separating its key trading divisions across Ingenuity, Beauty and Nutrition, which it said enables “material optionality and flexibility to enter into future strategic partnerships to generate value accretion for its stakeholders”.