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Matthew Moulding, the boss of the online beauty, nutrition and technology services group THG, is to surrender his golden share in the company in an attempt to restore the City’s confidence after a torrid fortnight.

Sky News has learnt that the owner of The Hut Group, which floated just over a year ago, will announce next week that it plans to move its listing to the premium segment of the London Stock Exchange in 2022.

To pave the way for that, THG executive chairman and chief executive Mr Moulding will give up his ‘founder’s share’ – which would prevent a hostile takeover of the company – during the course of next year.

City sources said this weekend that the move would be announced next week, and possibly as early as Monday morning.

It will represent a bid by Mr Moulding, who is THG’s biggest shareholder with a 22% stake, to establish a more conventional corporate governance structure after a calamitous week in which the company lost billions of pounds of value.

The abolition of its dual-class share structure and the prospective shift to a premium LSE listing will be welcomed by institutional investors who saw the value of their holdings tumble this week.

Some fund managers had objected to the extent of Mr Moulding’s control ahead of its float last year, although THG said at the time that the ‘special share’ would be retired after a maximum of 36 months.

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A City ally of the THG supremo said the decision reflected “a willingness to listen to the views of outside shareholders” about the existence of the ‘special share’ structure.

“Matt wants to do the right thing by the investors which came in at the time of the IPO,” the source said.

One investor said on Saturday that Mr Moulding and boardroom colleagues were now also considering recruiting an independent chairman as part of the process of stepping up to the LSE’s premium segment.

The investor added that the corporate governance changes would be viewed as a positive step, but that it was now essential if the company was to restore confidence among its wider shareholder base.

Sky News has also learnt that THG has been in talks in recent days about appointing Andreas Hansson, a senior SoftBank executive, as a non-executive director.

Dr Hansson, a former executive at the SoftBank-owned chip designer ARM Holdings, is chairman of Kahoot, an education technology platform also backed by the Japanese group.

The appointment, which has yet to be finalised, would cement a relationship between THG and the Japanese technology investment behemoth that was unveiled in May.

Under their deal, SoftBank invested $730m in THG’s ordinary shares and took an option – exercisable over a maximum of two years – to buy a 19.9% stake in THG Ingenuity, the division which builds and operates e-commerce sites for third-party clients such as Homebase and Revolution Beauty, for $1.6bn.

That option remains in place, and people close to the situation insisted this weekend that they were confident that it would be exercised.

Appointing a board member to a public company in which it holds a stake would be a rare move for SoftBank, while the agreement of THG to award a board seat to a 6% shareholder underlined the fact that their relationship was “a genuine partnership”, an insider said.

At a capital markets day this week, Mr Moulding talked up the potential of Ingenuity, but immediately saw THG’s shares slump by more than 30% amid scepticism about the lack of granular financial detail provided about the unit.

The scale of the share price fall stunned the company and its longest-standing external shareholders, which include Chrysalis Investments, the highly regarded team which has backed Klarna and Wise, the fintech giants.

THG’s other investors ahead of the IPO included BlackRock, the world’s biggest asset manager, and KKR, the New York-listed private equity investor.

The company, which is based in Manchester, has long been lauded as one of the UK’s biggest tech success stories, although there will now be intense pressure on its management to demonstrate that Ingenuity can become an engine of future earnings growth.

Since taking THG public, its executive chairman has cemented his status as one of Britain’s wealthiest people, landing a share windfall worth more than £800m late last year after hitting a number of financial targets set out in its flotation prospectus.

He already held a stake in the company worth about £1bn.

Earlier this year, Mr Moulding pledged a £100m stake in the company to a new charitable foundation, establishing him as one of Britain’s biggest individual philanthropists.

Nevertheless, THG’s promising debut on the public markets has been followed by a torrid period, with the shares more than halving during the last year.

As well as the proposed Ingenuity spin-off, it recently reiterated a plan to pursue a separate listing for its beauty division.

The company owns beauty sites such as Lookfantastic and Glossybox, and in August said it would pay about £275m to take control of Cult Beauty, a leading independent platform.

THG is also home to an online nutrition business, including MyProtein, which it says is the world’s largest sports nutrition brand.

Mr Moulding founded The Hut Group alongside John Gallemore – now its finance chief – in 2004, and it has since grown into a digital giant employing more than 10,000 people.

Ironically, his decision to surrender his golden share comes just months after a Treasury-sponsored review led by Lord Hill, the former EU commissioner, recommended that founders of fast-growing companies should be able to retain greater control after listing them through dual-class stock.

Deliveroo and Wise are the other main examples of tech companies which have floated using dual-class share structures this year.

THG floated at 500p-a-share, giving the company a market value of £4.5bn.

On Friday, the shares closed at 289.4p.

THG declined to comment on the looming governance changes.

Headline: Hut Group founder Moulding to give up golden share in bid to restore City confidence

Standfirst: The e-commerce group behind Cult Beauty and MyProtein is to apply for a premium London listing after a calamitous week that saw it shed billions of pounds of value, Sky News learns.

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Chair candidates battle to check in at Premier Inn-owner Whitbread

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Chair candidates battle to check in at Premier Inn-owner Whitbread

Two chairs of FTSE-100 companies are vying to succeed Adam Crozier at the top of Whitbread, the London-listed group behind the Premier Inn hotel chain.

Sky News has learnt that Christine Hodgson, who chairs water company Severn Trent, and Andrew Martin, chair of the testing and inspection group Intertek, are the leading contenders for the Whitbread job.

Mr Crozier, who has chaired the leisure group since 2018, is expected to step down later this year.

The search, which has been taking place for several months, is expected to conclude in the coming weeks, according to one City source.

Ms Hodgson has some experience of the leisure industry, having served on the board of Ladbrokes Coral Group until 2017, while Mr Martin was a senior executive at the contract caterer Compass Group and finance chief at the travel agent First Choice Holidays.

Under Mr Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn.

The company has also seen off an activist campaign spearheaded by Elliott Advisers, while Mr Crozier orchestrated the appointment of Dominic Paul, its chief executive, following Alison Brittain’s retirement.

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It said last year that it sees potential to grow the network from 86,000 UK bedrooms to 125,000 over the next decade or so.

Mr Crozier is one of Britain’s most seasoned boardroom figures, and now chairs BT Group and Kantar, the market research and data business backed by Bain Capital and WPP Group.

He previously ran the Football Association, ITV and – in between – Royal Mail Group.

On Friday, shares in Whitbread closed at £25.41, giving the company a market capitalisation of about £4.5bn.

Whitbread declined to comment this weekend.

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

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Bank chiefs to Reeves: Ditch ring-fencing to boost UK economy

The bosses of four of Britain’s biggest banks are secretly urging the chancellor to ditch the most significant regulatory change imposed after the 2008 financial crisis, warning her its continued imposition is inhibiting UK economic growth.

Sky News has obtained an explosive letter sent this week by the chief executives of HSBC Holdings, Lloyds Banking Group, NatWest Group and Santander UK in which they argue that bank ring-fencing “is not only a drag on banks’ ability to support business and the economy, but is now redundant”.

The CEOs’ letter represents an unprecedented intervention by most of the UK’s major lenders to abolish a reform which cost them billions of pounds to implement and which was designed to make the banking system safer by separating groups’ high street retail operations from their riskier wholesale and investment banking activities.

Their request to Rachel Reeves, the chancellor, to abandon ring-fencing 15 years after it was conceived will be seen as a direct challenge to the government to take drastic action to support the economy during a period when it is forcing economic regulators to scrap red tape.

It will, however, ignite controversy among those who believe that ditching the UK’s most radical post-crisis reform risks exacerbating the consequences of any future banking industry meltdown.

In their letter to the chancellor, the quartet of bank chiefs told Ms Reeves that: “With global economic headwinds, it is crucial that, in support of its Industrial Strategy, the government’s Financial Services Growth and Competitiveness Strategy removes unnecessary constraints on the ability of UK banks to support businesses across the economy and sends the clearest possible signal to investors in the UK of your commitment to reform.

“While we welcomed the recent technical adjustments to the ring-fencing regime, we believe it is now imperative to go further.

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“Removing the ring-fencing regime is, we believe, among the most significant steps the government could take to ensure the prudential framework maximises the banking sector’s ability to support UK businesses and promote economic growth.”

Work on the letter is said to have been led by HSBC, whose new chief executive, Georges Elhedery, is among the signatories.

His counterparts at Lloyds, Charlie Nunn; NatWest’s Paul Thwaite; and Mike Regnier, who runs Santander UK, also signed it.

While Mr Thwaite in particular has been public in questioning the continued need for ring-fencing, the letter – sent on Tuesday – is the first time that such a collective argument has been put so forcefully.

The only notable absentee from the signatories is CS Venkatakrishnan, the Barclays chief executive, although he has publicly said in the past that ring-fencing is not a major financial headache for his bank.

Other industry executives have expressed scepticism about that stance given that ring-fencing’s origination was largely viewed as being an attempt to solve the conundrum posed by Barclays’ vast investment banking operations.

The introduction of ring-fencing forced UK-based lenders with a deposit base of at least £25bn to segregate their retail and investment banking arms, supposedly making them easier to manage in the event that one part of the business faced insolvency.

Banks spent billions of pounds designing and setting up their ring-fenced entities, with separate boards of directors appointed to each division.

More recently, the Treasury has moved to increase the deposit threshold from £25bn to £35bn, amid pressure from a number of faster-growing banks.

Sam Woods, the current chief executive of the main banking regulator, the Prudential Regulation Authority, was involved in formulating proposals published by the Sir John Vickers-led Independent Commission on Banking in 2011.

Legislation to establish ring-fencing was passed in the Financial Services Reform (Banking) Act 2013, and the regime came into effect in 2019.

In addition to ring-fencing, banks were forced to substantially increase the amount and quality of capital they held as a risk buffer, while they were also instructed to create so-called ‘living wills’ in the event that they ran into financial trouble.

The chancellor has repeatedly spoken of the need to regulate for growth rather than risk – a phrase the four banks hope will now persuade her to abandon ring-fencing.

Britain is the only major economy to have adopted such an approach to regulating its banking industry – a fact which the four bank chiefs say is now undermining UK competitiveness.

“Ring-fencing imposes significant and often overlooked costs on businesses, including SMEs, by exposing them to banking constraints not experienced by their international competitors, making it harder for them to scale and compete,” the letter said.

“Lending decisions and pricing are distorted as the considerable liquidity trapped inside the ring-fence can only be used for limited purposes.

“Corporate customers whose financial needs become more complex as they grow larger, more sophisticated, or engage in international trade, are adversely affected given the limits on services ring-fenced banks can provide.

“Removing ring-fencing would eliminate these cliff-edge effects and allow firms to obtain the full suite of products and services from a single bank, reducing administrative costs”.

In recent months, doubts have resurfaced about the commitment of Spanish banking giant Santander to its UK operations amid complaints about the costs of regulation and supervision.

The UK’s fifth-largest high street lender held tentative conversations about a sale to either Barclays or NatWest, although they did not progress to a formal stage.

HSBC, meanwhile, is particularly restless about the impact of ring-fencing on its business, given its sprawling international footprint.

“There has been a material decline in UK wholesale banking since ring-fencing was introduced, to the detriment of British businesses and the perception of the UK as an internationally orientated economy with a global financial centre,” the letter said.

“The regime causes capital inefficiencies and traps liquidity, preventing it from being deployed efficiently across Group entities.”

The four bosses called on Ms Reeves to use this summer’s Mansion House dinner – the City’s annual set-piece event – to deliver “a clear statement of intent…to abolish ring-fencing during this Parliament”.

Doing so, they argued, would “demonstrate the government’s determination to do what it takes to promote growth and send the strongest possible signal to investors of your commitment to the City and to strengthen the UK’s position as a leading international financial centre”.

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Post Office to unveil £1.75bn banking deal with big British lenders

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Post Office to unveil £1.75bn banking deal with big British lenders

The Post Office will next week unveil a £1.75bn deal with dozens of banks which will allow their customers to continue using Britain’s biggest retail network.

Sky News has learnt the next Post Office banking framework will be launched next Wednesday, with an agreement that will deliver an additional £500m to the government-owned company.

Banking industry sources said on Friday the deal would be worth roughly £350m annually to the Post Office – an uplift from the existing £250m-a-year deal, which expires at the end of the year.

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The sources added that in return for the additional payments, the Post Office would make a range of commitments to improving the service it provides to banks’ customers who use its branches.

Banks which participate in the arrangements include Barclays, HSBC, Lloyds Banking Group, NatWest Group and Santander UK.

Under the Banking Framework Agreement, the 30 banks and mutuals’ customers can access the Post Office’s 11,500 branches for a range of services, including depositing and withdrawing cash.

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The service is particularly valuable to those who still rely on physical cash after a decade in which well over 6,000 bank branches have been closed across Britain.

In 2023, more than £10bn worth of cash was withdrawn over the counter and £29bn in cash was deposited over the counter, the Post Office said last year.

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A new, longer-term deal with the banks comes at a critical time for the Post Office, which is trying to secure government funding to bolster the pay of thousands of sub-postmasters.

Reliant on an annual government subsidy, the reputation of the network’s previous management team was left in tatters by the Horizon IT scandal and the wrongful conviction of hundreds of sub-postmasters.

A Post Office spokesperson declined to comment ahead of next week’s announcement.

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