Two weeks after The Hut Group rebuffed takeover bids, a decision that saw its share price plummet, the company has struggled to gain in the market. Today, the share price is already down by 2 per cent, extending yesterday’s aggressive bearish move, which saw prices drop by 4.5 per cent.
Two weeks ago, there were reports that Belerion Capital and King Street Capital had made a £2 billion offer for THG last month. The beauty and fitness company, which also runs the e-commerce platform ingenuity, had struggled throughout the year, and at the time, it looked like an opportune time for a takeover.
However, as rumours continued to swell, bosses at The Hut Group indicated they had rejected the offers. One of the reasons given for the rejection was that the offer was unacceptable and significantly undervalued the company. The Hut Group also informed investors that they would not be providing due diligence access to prospective parties.
The refusal of the company to proceed with the takeover saw The Hut Group shares tumble by 29 per cent to trade at 74p in just a few days. Since then, The Hut Group’s share price has struggled to return to where it was trading before the takeover talks dominated the news cycle.
Today, the share price continues to struggle, currently trading at 78 per cent. The current The Hut Group share price drop is also not surprising in the year-to-date data. It has lost over 60 per cent of its value in 2022, and all indications point to a possible continuation of the downward trend.
Therefore, unless a significant development, such as another bid for takeover or market conditions improve, my The Hut Group price prediction expects the prices to continue going down. As a result, there is a high likelihood that we will see prices trading below the 70p price level in the coming trading sessions.
This post was last modified on Jun 29, 2022, 14:03 BST 14:03