Ferrero offers sweet deal to buy Thorntons

Posted on 24 Jun 2015 by Jonny Williamson

Ferrero International – the Italian manufacturer of Ferrero Rocher, Nutella, Kinder Eggs and Tic Tacs – has put in an offer to acquire the British chocolate company, Thorntons Plc for £112m.

Reportedly backed by the board of Thorntons, the deal could bring together two of Europe’s largest chocolate makers and may herald the company’s first such foray since the death of its billionaire founder, Michele Ferrero in February this year.

According to the BBC, shares in Thorntons rose by almost 43% following the announcement, the equivalent of 145p per share, or £112m overall.

The combined effects of lower-than-expected sales in some supermarkets and some initial supply issues at its new centralised warehouse operation in Derbyshire have taken a toll on Thorntons in recent months, resulting in profit warnings in December 2014.

More recently, the firm described its half-year profits as “disappointing” in March, with pre-tax profit falling 8.8% to £6.5m, and its chief executive also announced last month that he would be stepping down.

Thorntons directors are quoted with calling the all-cash offer “fair and reasonable” and they intend to unanimously endorse that shareholders agree to the offer.

Thorntons chairman, Paul Wilkinson, stated: “Ferrero is a successful global confectionery business with a strong family heritage and as such represents a good cultural fit for Thorntons.”

Ferrero already owns 29.9% of Thorntons after buying stakes from majority shareholder Crystal Amber former chairman John von Spreckelsen, and some of Hotchkis & Wiley’s stake.

Ferrero said that if the offer was successful it would conduct a “strategic and operational review” of Thorntons’ business operations in an effort to identify potential synergies.