The maker of Ferrero Rocher chocolates has agreed to buy Thorntons for £112m after the ailing UK confectioner suffered falling supermarket orders and announced the resignation of its chief executive.
Ferrero International said it would pay 145p in cash for each Thorntons share – 43% more than Friday’s closing price, sending the shares surging by more than 40% to 144.25p. The Italian group has bought a 29.9% stake in Thorntons and has the backing of owners of another 4.5%.
Shares acquired by the family-owned Italian business include the 18.3% held by Crystal Amber, an activist investment fund that has been agitating for change at Thorntons, and 2.8% owned by Thorntons directors, including the chairman, Paul Wilkinson, and the departing chief executive, Jonathan Hart.
Ferrero, best known for its nutty chocolates wrapped in gold foil, said it would keep the Thorntons brand and the company’s factory in Alfreton, Derbyshire. The factory employs about 1,500 of Thorntons’ 3,500 staff.
Ferrero said it would conduct a full review of the business including where Thorntons would be based and the fate of fixed assets such as its 242 stores in Britain and Ireland.
Ferrero, which also makes Nutella and Tic Tac mints, has operated in the UK since 1966 but does not manufacture in Britain. Giovanni Ferrero, its chief executive, said the Italian company had “long admired Thorntons and what they have achieved in the UK as demonstrated by their tremendous customer loyalty, and we look forward to working with their experienced team.”
He added: “Our business was founded nearly 60 years ago out of a passion for chocolate and with a commitment to quality. We delivered our best ever results in the UK in 2014, giving us confidence that now is the right time to broaden our roots in this important market.”
Thorntons has struggled to find a place in the market amid fierce competition and changing tastes among chocolate buyers. Hart joined as chief executive in 2011 and tried to revive the business by selling more products to supermarkets and online while shutting unprofitable stores.
Hart quit last month after a difficult few months in which Thorntons released a pre-Christmas profit warning caused by falling supermarket orders. Profit fell almost 10% last year and Hart said supermarket sales would not revive in the coming months. He is due to leave the company at the end of this week.
Wilkinson said: “Ferrero is offering our shareholders an attractive premium to the average price of Thorntons’ shares over the last three months. Although the prospects for Thorntons as an independent company remain strong as the company embarks on the next phase of its strategy, the board of Thorntons also recognises the potential benefits to the brand and the business, including employees and all stakeholders, from combining with the Ferrero group.”
This article was written by Sean Farrell, for theguardian.com on Monday 22nd June 2015 09.47 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010