Shareholder Kelso said on Tuesday that it will vote against Lord Allen’s reinstatement at its upcoming meeting
An activist investor in THG has called for the ousting of its chairman, Lord Charles Allen, as it ramps up efforts for a shake-up of the Manchester-based retail group.
On Tuesday, shareholder Kelso announced it would oppose Lord Allen’s reappointment at the forthcoming meeting, criticising the leadership for a “lack of action and clarity” on strategies to enhance THG’s share value. Lord Allen, the former boss of ITV, was a appointed in 2022 to reform THG’s governance amid worries about Matthew Moulding had too much control.
Lord Allen witnessed Moulding relinquish his controversial ‘golden share’ that prevented takeovers, alongside other governance reforms. Despite these changes, THG has faced tough times, axing 2,500 jobs since early 2022 and reporting a £252million loss last year, albeit less than the £549million deficit the previous year.
With shares at 75p on Tuesday, down nearly 90% from their September 2020 IPO price, Kelso highlighted the stock’s “significant discount”, referencing a Peel Hunt broker report valuing the shares around 140p. However, with Kelso holding just 5.5 million of THG’s 1.33 billion shares, equating to approximately 0.4% ownership, Lord Allen’s position seems secure against Kelso’s challenge alone.
However, it said it is making the statement in “the spirit of shareholder democracy … to encourage shareholder debate”. Founded in 2022 by ex-Zeus Capital boss John Goold, Kelso’s mission is to boost the value of public companies.
Its chairman is Sir Nigel Knowles, who also leads city law firm DWF and was previously with DLA Piper. The investor has been vocal in urging THG to sell its Myprotein nutrition division, flagging major players like Nestle, Coca-Cola, and PepsiCo as possible suitors.
Kelso has reiterated its stance that THG should upgrade from a standard to a premium stock market listing. While THG has expressed similar aspirations, it has yet to make the leap. Kelso stated: “Whilst major strategic and structural issues remain unaddressed, the poor share price cannot be blamed on the London Stock Exchange.”
With dissatisfaction over the lack of progress, Kelso intends to vote against the chair at the forthcoming AGM. THG, on the other hand, has chosen not to respond to the comments.