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Property Entrepreneur Nick Candy Walks Away From Making THG Offer

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(Bloomberg) -- Nick Candy has walked away from making an offer for embattled UK online shopping emporium THG Plc, just hours after a rival consortium also dropped its pursuit.

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The property entrepreneur’s Candy Ventures Sarl vehicle said in a statement Thursday that it was withdrawing its interest in the retailer, confirming an earlier report by Bloomberg News.

Candy’s decision to walk away comes after a rival consortium -- Belerion Capital and hedge fund King Street Capital Management -- also confirmed it would not make an offer for THG, in a statement Thursday.

Shares in THG were down nearly 20% at 12:14 a.m in London. Overall THG’s stock has fallen more than 80% from its listing price.

Manchester-based THG did not engage with either party or grant any due diligence access over concerns about the levels of debt in both proposals, according to people with knowledge of the matter.

THG last month rejected a bid from the Belerion consortium valuing the firm at £2.1 billion ($2.5 billion), saying the offer of 170 pence per share “significantly undervalued the company.” Candy made two fully-funded approaches to THG that were also rejected.

Both the Belerion consortium and Candy Ventures had until 5 p.m. Thursday to announce whether they would make a formal bid or walk away. Barclays Plc and Jefferies Financial Group Inc. are advisers to THG. Bank of America and Deutsche Bank advised Candy Ventures on its bid.

Takeover speculation has swirled around THG since November when founder Matthew Moulding said he regretted floating the company and hinted he may take the business private again.

Moulding started the business, formerly known as the Hut Group, in 2004 with John Gallemore, who now serves as chief financial officer. It began selling CDs but today operates hundreds of websites selling beauty, skincare and health-food products as well as helping rivals sell online via the Ingenuity division.

THG was a stock market darling when it floated, attracting investment from SoftBank Group Corp., but has since been dogged with concerns about its governance and the growth prospects of Ingenuity.

Moulding has also kept a tight grip on THG as a major shareholder, landlord, chairman and chief executive officer. In March, THG appointed Charles Allen as chairman, with Moulding relinquishing the role to focus on being CEO. Moulding also pledged to give up his golden share, which allows him to veto a takeover, smoothing the way for THG to move its listing to the premium segment of London’s Stock Exchange.

THG said in a statement Thursday that all recent approaches have been unsolicited and significantly undervalued the company. “While THG is clearly aware of the macro-economic challenges, the company continues to perform well, and in line with its own expectations,” it said.

Belerion is an investment advisory firm that specializes in e-commerce investments and was founded by Iain McDonald, who is currently a non-executive director on THG’s board.

Candy is best known for working alongside his brother Christian in driving the development of the One Hyde Park luxury residential development in London’s exclusive Knightsbridge district.

(Updates with details of advisers in seventh paragraph)

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