The company announced late on Monday (10 May) that Japanese investor SoftBank had been granted an option to put $1.6 billion into its Ingenuity business on top of a capital raise of around $1 billion.
The fundraise, at 596p per share, included a subscription from Softbank of around $730 million and a placing of up to $270 million.
The placing size has since been increased to $320 million following strong demand.
Much of the excitement generated by THG’s 2020 market debut was related to Ingenuity, a technology platform which has been sold as a solution to third parties in much the same way as Ocado’s (OCDO) online solutions platform is sold to global supermarkets.
Liberum analyst Wayne Brown commented: ‘The ambition of management to think strategically out-of-the-box is notable. SoftBank will have a 19.9% call option, which values THG Ingenuity at £4.5bn, c. 63% of the current market cap.
‘Not only does this highlight the significant conglomerate discount THG is on, but leaves huge upside especially when one considers the commercial benefits that will accrue when working with Softbank’s portfolio.
‘This partnership with Softbank could be the first of many other deals to deliver value across the group.’