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THG PLC (LSE:THG) has announced its plan to move its ordinary shares from the equity shares (transition) category to the equity shares (commercial companies) (ESCC) category on the Official List maintained by the Financial Conduct Authority (FCA). This transfer is expected to take place no later than March 2025, with the appointment of a Sponsor to oversee the process.
This strategic move aligns with THG's ongoing efforts to increase its presence in the market and improve liquidity. The transfer, which does not require shareholder approval, has already been extensively discussed with shareholders. THG’s Board has concluded that it is in the company’s best interests to complete the transfer. The shift to the ESCC category is expected to boost THG’s standing, increase visibility, and improve the potential for inclusion in the FTSE UK Index Series.
Benefits of the Transfer
The Board believes that moving to the ESCC category will bring several advantages. Most notably, the transfer will make THG’s ordinary shares eligible for consideration in the FTSE UK Index Series, which could result in higher passive investment flows and greater liquidity for investors. Additionally, as part of the ESCC category, THG will be required to meet stricter standards under UK Listing Rules (UKLRs), offering shareholders increased protection.
The ESCC category enforces higher governance and compliance standards, particularly regarding significant transactions and related-party dealings. THG has already been voluntarily adhering to some of these requirements, but the transfer will make such adherence mandatory. By aligning with the stricter rules of the ESCC category, THG aims to enhance corporate governance, improve regulatory compliance, and attract new investment.
The group has also reiterated its commitment to the UK Corporate Governance Code and will continue to report against its provisions following the transfer. Once the FCA approves the transfer, THG expects to meet the eligibility criteria for the next FTSE Index review.
Potential Demerger of THG Ingenuity
In addition to the planned share transfer, THG is actively considering a potential demerger of its THG Ingenuity division. As part of its ongoing strategy to maximize shareholder value, the company has been conducting detailed reviews and has already received tax clearances from HMRC to proceed with structuring the demerger.
While a definitive timeline for the demerger has not been established, THG has confirmed that shareholder approval will be required before moving forward. The company will provide further details in due course. Importantly, the demerger of THG Ingenuity and the transfer of shares to the ESCC category can proceed concurrently, meaning that one will not delay the other.
Following the demerger, THG plans to focus on its core businesses, THG Beauty and THG Nutrition. Both divisions are globally recognized, highly profitable, and cash-generative, positioning them well to deliver long-term growth and returns to shareholders. The post-demerger Group will be capable of paying dividends, further enhancing its attractiveness to investors.
Next Steps
THG will continue to engage with the FCA and provide updates on the timeline for the share transfer and FTSE Index eligibility. Shareholders can also expect further communication regarding the THG Ingenuity demerger as the company works through the necessary steps to execute this strategy.
