Freshfields, Herbert Smith Freehills steer Mars’ £534m Hotel Chocolat acquisition

Freshfields acts for longtime client Mars as HSF counsels AIM-listed Hotel Chocolat

Freshfields Bruckhaus Deringer and Herbert Smith Freehills (HSF) are guiding the £534m takeover of listed UK chocolate retailer Hotel Chocolat by US food giant Mars. 

Freshfields is advising longtime client Mars on the deal, while HSF is acting for Hotel Chocolat. 

Shares in Hotel Chocolat soared more than 160% today (16 November) following news of the deal and have been trading close to the 375p per share cash offer price Mars has agreed to pay. 

The Freshfields team advising Mars is being led by corporate partners Piers Prichard Jones and Victoria Sigeti and senior associate Angus Scott, alongside associate Nikki Willson. 

Meantime the HSF team acting for Hotel Chocolat is led by Gavin Davies, head of the global M&A practice, and corporate partner Caroline Rae. They were supported by senior associate Sarah Ries-Coward and associates Sophie Stevens and Erika Joseph.

Mars’s offer is still well below peak valuation of more than £700m Hotel Chocolat achieved in late 2021. The company, which has more than 130 shops across the UK and a partnership in Japan, has grown revenue by 125% since its listing in 2016 but a drop in online sales following the end of the pandemic contributed to revenue falling 10% in FY23 to £205m. 

The company lacks the funds needed to make a substantial push overseas and said the deal with Mars would enable it to realise its overseas ambitions. It will also net founders Angus Thirwell and Peter Harris, who both own 27% of the equity, according to LSEG data, around £144m each. 

Thirwell currently serves as Hotel Chocolat’s chief executive and will continue to lead the company under the terms of the deal with Mars. 

“We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back,” Thirwell said. “By partnering with Mars, we can grow our international presence much more quickly using their skills, expertise and capabilities.”

Morgan Stanley has acted as financial advisor to Mars on the deal, while Lazard has acted as lead financial advisor and Liberum has acted as co-financial advisor to Hotel Chocolat.  

Freshfields also advised Mars when the company sold its coffee business to Italian coffee maker Lavazza in 2018, in a deal worth around $650m including debt. Lavazza was advised by Cleary Gottlieb Steen & Hamilton. 

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