BlackRock preparing to sell 58m THG shares

BlackRock is reportedly preparing to sell nearly half of its stake in THG, sending shares in the e-commerce business sliding.

According to Reuters, deal bookrunner Goldman Sachs said on Tuesday that BlackRock’s planned sale of 58m shares was priced at 195p per share, which is a 10.3% discount to the closing share price on Monday. The deal is valued at £113.1m.

Last month, THG shares tumbled after a capital markets day focused on its e-commerce technology platform Ingenuity failed to reassure investors.

US asset manager BlackRock is THG’s second-largest shareholder.

At 0940 GMT, the shares were down 7.2% at 201.80p.

Russ Mould, investment director at AJ Bell, said: "For a while THG was a stock market darling with investors clambering to own the stock in the belief it would play a key role in helping product manufacturers sell direct to consumers. Now it is losing fans at an incredibly rapid rate.

"The shares peaked at nearly 800p at the start of the year, and today they briefly traded below 200p amid chatter that BlackRock is trying to dump a block of shares. Asset managers rarely sell after a stock has already fallen so much unless they’ve lost all confidence in the business and/or found something that completely changes the investment case.

"The backlash against THG seems to centre on the fact that people bought into the hype without paying attention to valuation. Now that difficult questions are being asked about costs and more, particularly if the business is broken up into three as per the suggestion from THG, investors aren’t getting the answers they want - or they are not liking what they see."