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Ferrero Rocher makes offer on Thorntons

Article By: ,  Financial Analyst
June 22, 2015 1:36 PM

Italian chocolate maker Ferrero Rocher has offered to buy Thorntons.

The cash offer was for 145p per share and valued Thorntons at around £112 million. Shares in Thorntons rose more than 42 per cent on Friday's closing price.

Thorntons has urged shareholders to support the offer from Ferrero Rocher. The Italian company is known for products like Nutella spread, Ferrero Rocher chocolates, Kinder Eggs and Tic Tac sweets.

Paul Wilkinson, chairman at Thorntons commented: "Ferrero is a successful global confectionery business with a strong family heritage and as such represents a good cultural fit for Thorntons." He added that the board had given its unanimous recommendation for the offer.

Thorntons profit warnings

In December, Thorntons issued a profit warning and the company saw sales and profits fall in the six months to January 10th, with sales down 8.2 per cent in the previous 28 weeks.

March saw "disappointing" half-year profits, as well, with pre-tax profit falling 8.8 per cent to £6.5 million.

In May, the Telegraph reported that the chocolatier had experienced a "torrid" few months after weak performances over Mother's Day and Easter added to problems caused by poor sales over the Christmas period. It was also announced that chief executive Jonathan Hart would be stepping down.

The confectioner has also experienced supply difficulties at its centralised warehouse and has blamed its poor performance partly on supermarkets cutting orders.

Ferrero's UK success

In contrast to Thorntons recent difficulties, Ferrero Rocher has been thriving in the UK market, according to chief executive Giovanni Ferrero.

"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," he said.

The family chocolate firm posted sales of €8.4 billion (£6.02 billion) to the end of August 2014 and employs around 27,000 people. In February, founder Michele Ferrero died at age 89. His chocolate business made him the richest man in Italy.

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