Hotel Chocolat is poised to be taken over by Mars as bosses expressed hope that the resources of the US confectionery giant will propel its international growth ambitions.

Directors of the luxury chocolatier and retailer, which was founded 20 years ago, have recommended that shareholders accept an approach from Mars that values the London listed company at more than £530 million.

Investors responded by sending shares in Hotel Chocolat up by more than 160%, with the stock closing the day up 224p at 364p.

The 375p per share cash offer represents a premium of nearly 170% on Hotel Chocolat’s closing share price of 139p on Wednesday night, underlining the determination of Mars to secure the deal and ward off other potential suitors.

The approach follows a challenging period for Hotel Chocolat which saw it report “disappointing” results for the year ended July 2. It slumped to a loss for the period amid falls in online and international sales as it moved to restructure its cost base and re-enter the Japanese and US markets under more “capital light” models. The firm was forced to write off around £22m after its previous joint venture in Japan came apart.

READ MORE: Citizens back bid to revive famous Scottish street

Hotel Chocolat said yesterday that revenue growth in the first quarter of its current year has been boosted by opening more stores in the UK and extending the brand into new product categories.

But directors said that while it was confident the company could realise its potential in the UK in the medium term on a standalone basis, its ambitions for growth overseas will “require a level of investment that is likely to exceed that available from its own resources”.

Hotel Chocolat has more than 130 stores in the UK, including outlets in Glasgow, Aberdeen, and Edinburgh.

Angus Thirlwell, co-founder, and chief executive of Hotel Chocolat, said: “We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back. By partnering with Mars, we can grow our international presence much more quickly using their skills, expertise and capabilities."

Mars, which also owns the Celebrations, Dove, M&Ms, and Snickers brands, declared that it is “well-positioned” to support the growth of Hotel Chocolat in the UK and moves into new international markets.

READ MORE: Scotland tourism: 'Concerning' visitor trend hitting trade

And it said the deal would further strengthen its commitment to the UK, where it employs around 10,000 people, by “bringing a much-loved brand into its portfolio and deepening its relationships with consumers”.

Andrew Clarke, global president of Mars Snacking, said: “Hotel Chocolat is a differentiated and much-loved brand, with an impressive product offering and a deep commitment to its values of originality, authenticity, and ethical trading.

“The Mars and Hotel Chocolat businesses are highly complementary, and during the course of our discussions with Hotel Chocolat’s leadership it has also become clear that there is a very strong cultural fit - with purpose at the heart of both organisations, and a shared passion for quality and sustainability.”

Russ Mould, investment director at stockbroker AJ Bell, observed while the deal was the latest in a long line of bids for British companies by overseas players, “this wasn’t a case of a London stock trading on a depressed valuation and someone swooping in to buy it on the cheap”.

READ MORE: Historic Scottish law firms begin life as new entity

Mr Mould said: “Hotel Chocolat’s shares actually looked quite expensive based on near-term earnings because the company has been through a tough patch and has been trying to get back into profit.

“The fact Mars is willing to pay a 170% premium for the shares is remarkable on two accounts. First, bid premiums are typically in the 25% to 50% range so Mars paying so much more would suggest it has taken a long-term view of what the business is worth.

“Second, it suggests that Mars has spotted an opportunity and there is no way it wants to waste time with a low-ball bid. This looks like going in with its best offer with the hope of wrapping up the transaction as quickly as possible.”

However, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the deal was “likely to continue to rattle nerves about an exodus from London”.

Ms Streeter said: “The Mars owner clearly sees Hotel Chocolat as an appetising addition to its shelf of confectionery brands, providing an upmarket option to sit alongside Snickers, Twix, M&Ms, and the ubiquitous Mars bar.

“The price being paid is at a hefty premium to the share price at the close of trading yesterday but given the weakness of the pound would have helped fuel hunger for the acquisition.”

Ms Streeter added: “Although the company [Hotel Chocolat] posted two profit warnings earlier this year, the recent update has been more encouraging, showing a turnaround bearing fruit, with stronger sales particularly at its new shops.

“International expansion however has proved super tricky for Hotel Chocolat, with its Japanese joint venture forced through insolvency. The clout of the Mars operation should help ensure Hotel Chocolat’s future ventures are far slicker, and the company clearly sees great opportunity for the brand’s expansion into other markets, particularly in the airport retail sector.’’