Ferrero to buy Thorntons for £112m
The board of chocolate maker Thorntons said it has reached an agreement to sell itself to Italian rival Ferrero Rocher for around £111.9 million.
The offer for the Derbyshire-based firm represents 145p a share, a 42.9% premium over the undisturbed closing price of the shares last Friday before the bid was announced.
Ferrero Rocher, which makes the distinctive round hazelnut chocolates wrapped in gold foil, said the move was a chance to grow in the important UK market, where it has operated since 1966. Shares in Thorntons jumped 42%.
Thorntons chairman Paul Wilkinson said: "Ferrero is a successful global confectionery business with a strong family heritage and as such represents a good cultural fit for Thorntons.
"The board of Thorntons therefore has given its unanimous recommendation for the offer from Ferrero."
Ferrero chief executive Giovanni Ferrero added: "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."
In February Thorntons said its half-year profits were "disappointing" after they dipped 8.2% to £128.2 million. It said it was hit by a cut in orders at two major supermarkets and teething problems at its new centralised warehouse.
Thorntons was established by Joseph William Thornton in 1911, and has 242 of its own stores and cafes in the UK and Ireland and a franchise estate of 158 outlets.
It employs some 3,500 staff, and around 3% of its revenues are currently generated overseas.
Ferrero, which also makes Kinder and Nutella, posted sales of 8.4 billion euros (£6 billion) in the year to the end of last August, and employs around 27,000 staff.
Ferrero Rocher is famous for the TV ad in the 1990s which featured the chocolates being passed around at an embassy party with the much parodied line: "Ambassador, with these Rocher, you're really spoiling us."
The two firms have not publicly set a date for the completion of the sale, which is subject to regulatory review.
On completion of the deal Thorntons will be delisted from the London Stock Exchange, where it has traded since 1988.
Ferrero said once the deal is concluded it will carry out a strategic review to see how to best grow the brands and look for savings.
However, the family-owned Italian firm said it intends to retain Thornton's key factory in Alreton, which employs around 1,500 staff.
Thorntons reported revenues of £222.4 million and an operating profit of £8.6 million for the year to the end of June 28 2014.