UPDATE 2-The Hut Group shares soar 30% after bumper $7 bln London IPO

(Recasts, adds shares, no comment from LSE)

By Abhinav Ramnarayan and Sinead Cruise

LONDON, Sept 16 (Reuters) - The Hut Group's shares
soared more than 30% in the company's first day of trading on
Wednesday after batting away corporate governance concerns to
seal the first major British initial public offering in seven
years.

The company, which helps sell retail brands, including
Lookfantastic and skincare group ESPA, sold 376 million shares
at 500 pence each to raise 1.88 billion pounds in a float that
valued the firm at 5.4 billion pounds ($6.96 billion).

The biggest London stock market debut since Royal Mail Plc
in 2013 nets the company 920 million pounds while
shareholders, led by founder Matthew Moulding, will share gross
proceeds of 961 million pounds.

The shares were trading at 654 pence at 0732 GMT.

While The Hut Group's market debut gave a boost to what has
been a terrible 2020 for new listings, with the COVID-19
pandemic driving European IPO volumes down to their lowest level
in eight years, some investors have raised concerns over the
structure of the deal.

For example, Moulding will remain both chairman and chief
executive of the company, while the shares are to be issued in
different "classes", allowing him voting powers vastly superior
to most other London-listed companies.

These structural features mean that The Hut Group will not
be granted a so-called premium listing and will not be eligible
for the FTSE 100 despite being big enough for the blue-chip
index.

The London Stock Exchange declined to comment.

One source close to the deal said the LSE standard listing
required high levels of governance and was equivalent to other
European exchanges.

BlackRock, Henderson Global Investors, funds
managed by Merian and the Qatar Investment Authority
agreed to buy 565 million pounds of the shares offered.

"There wasn't too much concern about this during the
bookbuild - investors understand that the founder is a key part
of the story," said a second source familiar with the
transaction.

This source said that the strong IPO environment meant other
companies could take heart from THG's success and also launch
deals.

"We expect it to be a busy fourth quarter," he added.

JP Morgan, Citi, Barclays and Goldman
Sachs were global coordinators. HSBC, Jefferies
and Numis acted as joint bookrunners.
($1 = 0.7764 pounds)
(Reporting By Abhinav Ramnarayan and Sinead Cruise, editing by
Karin Strohecker and Jane Merriman)