Mars owner to swallow up London-listed Hotel Chocolat
- Owner of Mars has agreed to buy Hotel Chocolat in a cash offer valuing the company at £534 million.
- The offer from HIVE Bidco, a subsidiary of Mars Incorporated, is at a premium of almost 170% to its share price at the close of business yesterday.
- The aim is to help the chocolatier to expand in international markets.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘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.’’