(Sharecast News) - Premium chocolatier Hotel Chocolat said on Thursday that it has agreed to be bought by US food giant Mars in a £534m deal.
Under the terms of the acquisition, Hotel Chocolat shareholders will receive 375p per share in cash. This represents a premium of around 169.8% to the closing share price on Wednesday.
Chair Stephen Alexander said: "Hotel Chocolat is a brand with strong long-term prospects and today's deal will allow it to grow further and faster.
"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."
At 0955 GMT, the shares were up 163% at 366.16p.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "This is the latest big company to take a bite out of the UK-listed market and is likely to continue to rattle nerves about an exodus from London. The Mars owner clearly sees Hotel Chocolat as an appetising addition to its shelf of confectionery brands, providing an upmarket option to sit alongside Snickers, Twix, M&Ms and the ubiquitous Mars bar.
"The price being paid is at a hefty premium to the share price at the close of trading yesterday but given the weakness of the pound would have helped fuel hunger for the acquisition. Hotel Chocolat has a loyal customer base of cocoa lovers, helped by its tasting club and its strategic locations across the travel network. Although the company posted two profit warnings earlier this year, the recent update has been more encouraging, showing a turnaround bearing fruit, with stronger sales particularly at its new shops. International expansion however has proved super tricky for Hotel Chocolat, with its Japanese joint venture forced through insolvency.
"The clout of the Mars operation, should help ensure Hotel Chocolat's future ventures are far slicker, and the company clearly sees great opportunity for the brand's expansion into other markets, particularly in the airport retail sector."
