UPDATE 3-The Hut Group shares soar 30% after bumper $7 bln London IPO

* THG prices one of London's biggest tech IPOs

* Deal boosts moribund year for listings

* Analysts flag governance concerns over deal structure
(Adds quotes from analysts, further background, updates price)

By Abhinav Ramnarayan and Sinead Cruise

LONDON, Sept 16 (Reuters) - The Hut Group's shares
soared 30% in the company's first day of trading on Wednesday
after batting away corporate governance concerns to seal its 5.4
billion pound ($6.99 billion) listing, one of London's largest
tech IPOs to date.

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.

The biggest London stock market debut by market cap since
Royal Mail in 2013 nets the company 920 million pounds
while shareholders, led by founder Matthew Moulding and private
equity group KKR, will share gross proceeds of 961
million pounds. KKR sold its entire shareholding.

The shares were trading at 646 pence at 1040 GMT.

Analysts suggested the stock surge might prompt some
questions as to whether the deal was pegged at the right price.

"Time will tell as to whether the valuation is a solid one,
or whether KKR has made the right move in selling out of their
entire stake," CMC markets analyst Michael Hewson said.

GOVERNANCE CONCERNS

While The Hut Group's debut gave a boost to a terrible 2020
for new listings, with the COVID-19 pandemic driving European
IPO volumes to their lowest since 2012, the unusual structure of
the deal has raised some concerns among corporate governance
watchers.

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

"They are completely separate roles and (combining the two)
undermines the board's primary duty, which is to challenge the
CEO," Francisco Lopez de Saa, stewardship director at Minerva
Analytics, said.

He said the offering of different share classes was
unsuitable for the UK market and reduced the protection of
minority shareholders.

This structure means that The Hut Group will not achieve 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.

He said companies would take heart from THG's success and
launch deals this year. "We expect a busy fourth quarter."

Citi, JP Morgan, Barclays and Goldman
Sachs were global coordinators. HSBC, Jefferies
and Numis acted as joint bookrunners. Rothschild
advised the company.
($1 = 0.7724 pounds)
(Reporting By Abhinav Ramnarayan and Sinead Cruise, editing by
Karin Strohecker and Jane Merriman)