By Ian Walker
Hotel Chocolat Group shares had their best performance in seven years after the company agreed to a 534 million pound ($663.1 million) takeover by Mars Inc., supporting the company’s growth both within and outside of the U.K.
Shares at 1038 GMT were up 225.0 pence at 364.0 pence, their highest one-day rise since October 2016.
“Mars has expressed its excitement about the long-term prospects of the Hotel Chocolat business and has been clear that it intends to continue to support Hotel Chocolat’s business in the U.K. and to explore opportunities to grow the Hotel Chocolat brand outside the U.K.”, the London-listed chocolate manufacturer said Thursday.
It added that the company’s ability to raise equity funding for its international expansion in the short to medium term would be difficult if it continues as a listed company.
Mars said that it is well positioned to support Hotel Chocolat’s next growth phase with its international footprint, global supply chain and extensive commercial relationships.
“The U.K. has been an important market for Mars, and it expects this to be complemented by the acquisition of Hotel Chocolat, with its distinctive capabilities in product development, luxury gifting and immersive brand experiences,” the company said.
Mars has operated in the U.K. market since 1932 where it currently employs around 10,000 people.
Under the deal, accepting Hotel Chocolat shareholders will get 375 pence in cash for each share held. The price is a massive premium to the company’s closing price of 139.0 pence on Wednesday and its IPO price of 148 pence in May 2016.
“Joining forces with Mars will deliver great value through the cash offer for Hotel Chocolat shareholders and the combination will create exciting opportunities for Hotel Chocolat employees as part of Mars,” Chairman Stephen Alexander said.
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