THG founder Matt Moulding has used the sale of Hotel Chocolat to renew his criticism of London’s public market.

It follows the news that US confectionery giant Mars has bought the business for £534m.

The deal is expected to complete in January 2024 and would see Hotel Chocolat delist from the London Stock Exchange.

Moulding has regularly criticised the behaviour of hedge funds, media and bank analysts, who he says have created negative coverage against listed companies, including his own Manchester-headquartered eCommerce giant.

In his latest LinkedIn blog, Moulding compared the sale of Hotel Chocolat to ‘Groundhog Day’, pointing out that the amount of capital raised on IPOs in London is now lower than Turkey and Romania.

Moulding wrote: “Hotel Chocolat IPO’d in May 2016 at 148p a share. At the time, it had sales of c£85m and £10m EBITDA.

“Since then Hotel Chocolat’s sales and profits have more than doubled to £205m and £24m – a true British success story.

“Despite this stunning performance, the shares recently fell to all-time lows of 100p.

“Six years of hard work, probably c£50m of LSE related costs and fees, and it’s valued at a third less than at IPO.

“Mars has agreed to pay 375p a share to take Hotel Chocolat  off the LSE – a whopping +270 per cent premium to the 100p share price just a few weeks ago.

“The demise of the LSE has led to over 100 companies having left London versus this time last year. Another 19 companies, each worth over £100m, have also confirmed plans to exit, with almost nobody planning to join.

“LSE data shows share volumes traded in London are down c40 per cent YTD in 2023, and 50 per cent in Q3, as investors swerve the UK for safer shores.

“Where are those safer shores?  Wait for it….Romania, Turkey and pretty much anywhere except London.”

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Moulding said the LSE was no longer the place where ambitious companies  go to raise investment.

He said one of the reasons why could be found in an interview Carson Block, CEO of US investor Muddy Waters, did in the City AM business newspaper, which THG bought in July.

Moulding explained: “He (Block) recently suggested that short sellers, like him, will always attack tech companies on the LSE – because they should be listed in the US, not the UK. If founders list tech companies in London, he simply says they’re ‘not that bright’.”

The entrepreneur has contributed to a review by Lord Hill into proposed reforms to the UK listing regime but believes the changes will do little for the London Stock Exchange.

In particular, he’s questioned the LSE’s governance processes, citing the recent example of the Sheffield tech firm WANdisco.

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