Matthew Moulding, the founder of the Hut Group (THG), is dropping his golden share in an overhaul of corporate governance at the online retailer.
The share gives him a veto over any potential takeover, for example, but has never been popular with investors.
Shares in THG plunged 35% last week after a corporate presentation detailing plans for its ingenuity e-commerce platform and a spin-off of its retail arm left investors unconvinced.
In a statement today, THG said as part of its plans to get a premium listing in London, it would drop the special share and also carry out a further review of corporate governance to be carried out by its board.
THG currently has a standard listing, a second-tier segment on the LSE with fewer ownership governance restrictions.
Moulding currently is both the company’s chairman and chief executive, while the way the company is structured at present means it cannot be included in the FTSE 100.
Inclusion in the FTSE 100 would mean tracker funds having to buy the shares though a premium listing will also mean THG having to report related party transactions.
Moulding controls around 25% of the business including his family’s interest so this would mean future deals between him and his private companies being disclosed.
In a statement, Moulding said: “After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the Premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees.”
THG was floated at 500p last September valuing it at GBP5.4bn, with a placing in May raising a further GBP1bn that saw Japan’s Softbank taking just under a 10% stake.
At the same time as that fundraise, Softbank also agreed on a separate deal to inject US$1.6bn into Ingenuity in the future.
Questions over whether the Japanese tech-focused bank would go ahead with that investment were apparently raised at last week’s meeting and unhappiness with the company’s responses added to last week’s share price slump.
THG shares rallied today on the governance news, adding 4.6% to 302.6p.
Analysts at Jefferies told Reuters that the changes announced today showed a willingness to engage on shareholder concerns, but that ultimately progress on the e-commerce front is needed for the shares to recover.
THG’s next trading update is scheduled for October 26.
