Mars to acquire Hotel Chocolat for £534m

The U.S. food giant offered Britain's Hotel Chocolat a £534 million takeover offer, and the chocolate specialist accepted, allowing the company to expand globally and making a tidy profit for its founders.

Following the two companies' announcement of the deal on Thursday, shares of Hotel Chocolat surged in early trade. At 364 pence, they were trading near the cash offer price of 375 pence per share, which was 170% more than the closing price of Hotel Chocolat on Wednesday and recommended by the board of the UK company.

Both co-founder Peter Harris and chief executive Angus Thirlwell of Hotel Chocolat, who together hold 27% of the company's equity based on LSEG data, have declared their intention to accept the offer, which implies that they will receive roughly 144 million pounds from the deal.

With more than 130 locations, Hotel Chocolat was founded with the goal of making chocolate exciting. It was successful in introducing ethical, reasonably priced luxury to the British high street.

However, things haven't always been easy. The shares were trading at 375 pence in April 2022, a significant drop from their peak of 540 pence in late 2021, when mishandled expansion attempts severely damaged the company and negatively impacted UK sales due to rising living expenses.

Thirlwell intends to continue running the business for the next five years while it is owned by the Mars family, which also makes M&Ms, Snickers, and Skittles.

Despite earlier setbacks, he said, the Hotel Chocolat brand was growing in Japan and the US, and the company would soon need to establish manufacturing and develop infrastructure in those markets, which would require funding and resources.

(Sources: investing.com, reuters.com)