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Hotel Chocolat’s founders are set for a big payday as the US firm answers its pleas for the money to expand the UK brand’s international presence.
By James Sillars, Business reporter @SkyNewsBiz
Hotel Chocolat has agreed to a £534m takeover offer from Mars, the maker of goods from Snickers bars to Pedigree dog food.
The UK specialist chocolatier retailer said the cash offer represented a 170% premium to its London share price of 139p.
Shares soared by 164% at the market open in response.
Mars has proposed to pay 375p for each Hotel Chocolat share under the terms.
As an alternative, investors can elect to secure a share in the bid company for each Hotel Chocolat share they already own.
The board has recommended the deal.
The company, which has a 20-year history but just seven as a London-listed firm, said it would allow its brand to expand, particularly internationally.
Hotel Chocolat, so-named due to its hotel on a cacao estate in Saint Lucia, currently has 130 stores and a partnership in Japan but lacks the substantial funds needed to make a big push overseas.
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Chief executive and joint founder Angus Thirwell, who will stay with the business under the terms of the deal with Mars, said: “We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back.
“By partnering with Mars, we can grow our international presence much more quickly.”
He and co-founder Peter Harris both own 27% of the equity, according to LSEG data.
While they bare set for a bumper pay day, the deal will raise further concerns over the attractiveness of UK firms given continued weakness for the pound versus the US dollar.
It makes the purchase of companies based in this country cheaper.
The takeover would also see the end of Hotel Chocolat’s London listing, exacerbating worries over the health of the City of London.
Andrew Clarke, global president of Mars Snacking, said: “The Mars and Hotel Chocolat businesses are highly complementary, and during the course of our discussions with Hotel Chocolat’s leadership it has also become clear that there is a very strong cultural fit – with purpose at the heart of both organisations, and a shared passion for quality and sustainability.”
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