Hotel Chocolat Gets $242 Million Price Tag in London Listing

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  • Founders and managers take out 43.5 million pounds in IPO
  • Company raises 12 million pounds, adding to `chocolate bonds'

Hotel Chocolat Group Plc, the U.K. luxury chocolate retailer, will be valued at 167 million pounds ($242 million) when it lists shares on London’s Alternative Investment Market next week.

The initial public offering will raise 55.5 million pounds, of which 43.5 million pounds will go to founders Angus Thirlwell and Peter Harris along with some senior managers. The company will net 12 million pounds to accelerate its expansion plan, Hotel Chocolat said Thursday. Thirlwell and Harris will continue to own two-thirds of the stock.

Angus Thirlwell

Photographer: Simon Dawson/Bloomberg

Founded in 1993, Hotel Chocolat has grown to become one of the U.K.’s best known purveyors of luxury chocolate. The retailer now has 84 stores and about 500,000 online customers. Money raised in the IPO will be used to expand its store network, manufacturing facilities and improve the digital offering, the company has said.

The offering was “substantially oversubscribed” and attracted a “wide spectrum of investors,” Thirlwell said in a phone interview.

“Being listed is going to confer some added allure to the brand,” said Thirlwell, whose father was one of the co-founders of the Mr Whippy ice cream brand. An increased profile will help attract more talented staff, he said.

The IPO provides a new method of funding for the retailer, which in the past has borrowed money from customers in the form of “chocolate bonds.” Instead of interest, bondholders receive a box of chocolates either every month or every two months, depending on the amount of the loan. Two tranches of bonds were issued in 2010 and 2014, raising a total of about 7 million pounds, most of which is still outstanding.

“It’s one of the ways the business continues to be funded,” Thirlwell said. “Apart from a working overdraft, it’s the only debt we have.”

The shares will be sold at 148 pence each, with trading due to commence on May 10.

Liberum Capital Ltd. is advising on the IPO.