The Hut Group shares climb on buyout speculation

Shares in British e-commerce giant The Hut Group surged on Friday on speculation it could be sold.

The group is reportedly being circled by private equity firms potentially looking to buy the business, according to a Betaville blog post.

Advent International and Leonard Green are two firms understood to be exploring a buyout.

Shares in the group were up 16 percent on Friday following the report. They were back down 6 percent as of 10:00 GMT Monday morning.

It comes after the group’s shares plunged over 82 percent over the past year amid concerns over its corporate governance.

In the year to December 31, THG reported record revenue of 2.2 billion pounds, up 37.9 percent compared to a year earlier and up 95 percent compared to two years ago, prior to the outbreak of the pandemic.

But the group also warned that its profit margins are expected to fall below analysts’ expectations.

It said EBITDA margin is expected to be in the range of 7.4 percent to 7.7 percent, compared to market expectations of around 7.9 percent.

Shares fell further following the trading update.