News of a takeover bid by Italian rival Ferrero sent shares in chocolatier Thorntons (THT) up more than 40 per cent. That’s despite months of sliding sales, profit warnings and the planned departure of its chief executive, Jonathan Hart. Mr Hart announced his decision to leave after a profit warning just before Christmas shed light on several operational difficulties at the company. He had served four years in the role.
Now Ferholding, a British-based subsidiary of Ferrero, has offered the high street retailer 145p per share, or £112m in total. That represents a 43 per cent premium to Thorntons’ closing share price on 19 June or a 100 per cent premium based on the group’s share price just two months ago.
It marks the first acquisition of a branded company for Ferrero - the fourth-largest confectionery brand in the world after Mondelez, Mars and Nestlé. Its Kinder brand is the world’s third-biggest by revenues after Wrigley and Cadbury, but it also owns other household names such as Nutella, Tic Tacs and Mon Cheri. The group has been undergoing its own sea change since its octogenarian owner – Michele Ferrero – died earlier this year. Since then, his son Giovanni Ferrero has shifted the company’s strategy, positioning it as an acquirer rather than a potential target.
It’s claimed Ferrero set up Ferholding just to facilitate the bid for Thorntons, having previously stated its plans to more than double its UK market share over the next five years. The offer appears to have gone down well, satisfying both management and the group’s largest shareholder, Aim-traded investment company Crystal Amber (CRS), a Simon Thompson recommendation, which has already sold its stake. At the time of writing, this put Ferrero in control of 30 per cent of Thorntons already.
Ferrero has said it intends to maintain the Thorntons brand, and the Derbyshire factory which employs close to half of Thorntons’ 3,500 employees. However, it will conduct a thorough review of the remaining 242 stores and even reconsider where the group will be based long-term.
