An activist investor in THG has demanded the removal of its chairman, Lord Charles Allen, as it continues pushing for a shake-up of the Manchester-based retail group.
Shareholder Kelso said on Tuesday that it will vote against Lord Allen’s reinstatement at its upcoming meeting, criticising a “lack of action and clarity” from bosses on how they will boost THG’s share price.
Lord Allen, the former boss of ITV, was named chairman in 2022 with the task of overhauling THG’s structure, amid concerns that chief executive Matthew Moulding had too much control over the business.
Since then, Moulding has given up his contentious so-called golden share which allowed him to block any attempt to take over the company, along with several other corporate governance initiatives.
But THG has also endured a difficult trading period, having slashed 2,500 jobs since early 2022 and losing £252 million last year. That was an improvement on a £549 million loss the year before.
Shares were trading at 75p on Tuesday, which is about 90% down on their value when the company listed in London in September 2020.
Kelso said the stock is at a “significant discount”, citing a report by broker Peel Hunt which said the shares should be at about 140p.
Lord Allen is unlikely to be unseated by Kelso’s calls alone. The activist investor owns 5.5 million shares in THG out of 1.33 billion, meaning its shareholding is roughly 0.4% of the company.
However, it said it is making the statement in “the spirit of shareholder democracy … to encourage shareholder debate”.
Kelso was founded in 2022 by former boss of Zeus Capital John Goold with the aim of increasing the value of listed firms. Its chairman, Sir Nigel Knowles, is also chief executive at city law firm DWF and formerly of DLA Piper.
It has previously demanded that THG offload its Myprotein nutrition business, identifying the likes of Nestle, Coca-Cola and PepsiCo as potential buyers.
The shareholder also doubled down on previous calls that THG should switch from a standard stock market listing to a premium one. THG has previously stated its intentions to make such a move, but has not yet done so.
Kelso wrote: “Whilst major strategic and structural issues remain unaddressed, the poor share price cannot be blamed on the London Stock Exchange.
“As a result of the lack of progress we plan to vote against the chair at the upcoming AGM.”
THG declined to comment.