Ferrero Rocher In £112m Buyout Of Thorntons

Ferrero Rocher is to buy the struggling UK confectioner Thorntons (LSE: THT.L - news) in a deal worth around £112m.

The board of the Derbyshire-based firm said it had agreed an offer from its Italian rival that represents 145p a share.

This is a 42.9% premium over the closing price of the shares last Friday ahead of the buyout being announced.

Ferrero Rocher, which makes the distinctive gold foil wrapped hazelnut chocolates, said the move was the opportunity to expand in the important UK market, where it has had a presence for nearly 50 years.

The company is best known for the nineties TV advert which featured the chocolates being passed around on a silver salver at a swanky embassy reception with the now famous line: "Ambassador, with these Rocher, you're really spoiling us."

Shares (Berlin: DI6.BE - news) in Thorntons leapt 42% on news of the takeover.

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 said: "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."

Last month, it was announced the chief executive of Thorntons, Jonathan Hart, was to step down following a difficult four years at the helm.

This included high profile store closures halving Thorntons' high street presence to around 180 shops.

There were also around 500 jobs lost over the period.

During the busy Christmas period, the company reported a 6.4% decline in sales for the 14 weeks to 10 January 2015.

The company, which was established by Joseph William Thornton in 1911, put the weak numbers down to major disruption at its centralised warehouse and a sharp fall in anticipated orders from major supermarkets and grocers.

Ferrero, which also makes Kinder and Nutella, posted sales of 8.4bn euros (£6bn) in the year to the end of last August, and employs around 27,000 staff.

The two firms have not publicly set a date for the completion of the sale, which is subject to regulatory review.

Once the deal is finalised, Thorntons will be delisted from the London Stock Exchange (Other OTC: LDNXF - news) , where it has traded since 1988.

Ferrero said it will also 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 plans to keep Thorntons' main factory in Alfreton, where around 1,500 staff are employed.