Shares in chocolate manufacturer and retailer Thorntons sweetened 13% today after it emerged efforts were being made to take the company private.
The group, which has more than 400 shops, said management had been working with potential backers on a move to end its 15-year stock market listing.
A statement from those directors not involved, including chairman John Thornton, said talks with a private equity house were at an early stage.
The group, which was worth £90m prior to today’s announcement, has endured a tough time in recent months, with profits for the last financial year down £700,000 at £6.4m and summer sales affected by the hot weather.
Thornton’s range of products stretch from speciality chocolate, toffee and boiled sweets to cakes, drinks and ice cream.
The group, which is based in Somercotes, Derbyshire, has traditionally sold its products through its own shops, but is now moving increasingly towards retailing through supermarkets and other channels.
Today’s statement from Thorntons confirmed “preliminary discussions” with a private equity house which “may or may not” lead to a takeover offer.
It added: “The independent directors have granted permission to the management team to evaluate on a limited basis potential sources of finance to enable the company to be taken private.”
Shares in Thorntons, which dipped as low as 68p in 2000, stood at 135p last night before adding another 17.5p to stand at 152.5p today.
Analysts believe Thorntons, which dates back to 1911, could attract a price as high as 180p per share – valuing the business at around £120m.
Among factors driving the price is likely to be the strength of the brand name and the size of the retail estate.
Rhys Williams of Seymour Pierce stockbrokers said: “We believe this has been done in order to create shareholder value, as, despite the more focused strategy over the past two and a half years, the team has consistently failed to deliver in pre-tax terms.”
The discussions with private equity backers are likely to be led by chief executive Peter Burdon, who joined Thorntons in May 2000 following almost five years with Boots.
References: EGi News 15/10/03
