Kelso ups stake in THG, applies pressure to board

Investment firm Kelso has said that it has increased its stake in e-commerce retail company THG as it continues to put pressure on its board to deliver on commitments to investors.

The activist shareholder has now upped its holding on THG, purchasing an additional 2.4 million shares which takes its total beneficial interest to 7.4 million.

Kelso also said it had continued its analysis into THG, which it believed would have a “positive year” in 2023, as the “operational headwinds” it had experienced in 2022 “continue to reverse”.

The firm noted that there was more THG’s board and management could do in order to ensure the share price reflected the intrinsic value of the company, adding that it would like it to deliver on commitments made to investors.

Among its recommendations, Kelso suggested for THG to consider transitioning from the Standard List to the Premium List of the London Stock Exchange, a move that would require THG to provide a progress update after it reversed its decision to do so in 2022.

Furthermore, Kelso is also urging THG to continue to review strategic options to ensure underlying value is realised in a practicable timeframe, as well as consider a share buyback programme following the pending preliminary results announcement.

The firm further believes that THG need to reinvigorate its communications with its investment community to improve the understanding of potential for its business.

In a regulatory filing, John Goold, CEO of Kelso said: “Mark, Jamie and I, with the support of our board, continue to be excited about the prospects for Kelso over the long term and are delighted to announce today a 50 percent increase in our interest in THG shares.

“The current stock market conditions suit our strategy of finding undervalued situations where we believe through our focused efforts, we can help unlock value. We continue to believe that THG represents a great opportunity to make significant returns for Kelso shareholders.”