A well-known bidder is attempting to acquire the Hershey Company once more.
According to Bloomberg, Mondelez International Inc., the firm that makes Ritz and Oreo, is considering acquiring the snack and candy manufacturer situated in Derry Township. Several people with knowledge of the situation who asked not to be named because they claimed that conversations are private were quoted by the news website.
According to Bloomberg, the sources stated that talks are still in their early phases and that it is unsure whether they would result in an agreement.
According to Bloomberg, a combination may result in a $50 billion combined sales monster in the food market. Chicago-based Mondelez made an unsuccessful effort to acquire Hershey in 2016 with a $23 billion cash and equity offer.
According to Bloomberg, Hershey’s stock increased by 19% on Monday, the most intraday gain in over eight years.
The approval of The Hershey Trust would be necessary for any sale. It was established in 1905 and currently holds a majority stake in the well-known confectionery manufacturer Hershey Entertainment & Resorts. The boarding school for kids from low-income families in Derry Township is supported by the profits from the two enterprises.
Todd Scott, a spokesman for the Hershey firm, told PennLive that the firm doesn’t comment on rumors or conjecture. According to Bloomberg, when contacted for comment, The Hershey Trust and Mondelez did not reply.
According to Bloomberg, snack manufacturer Mars Inc. agreed in August to purchase Kellanova for roughly $36 billion, including debt, making it the largest acquisition of the year. According to Bloomberg data, Hershey’s total worth, including debt, is approximately $46 billion.
After Betaville, a financial blog and subsidiary of the Financial Times, issued an undercooked alert last week, rumors of a takeover intensified.
The following are the raw alerts: This scuttlebutt has just been received and hasn’t been verified by any of Betaville’s knowledgeable RARE sources, let alone official journalistic routes (such as bankers, public relations executives, etc.). According to the website, the rumor may be complete nonsense, trash, or codswallop, but it might also contain something worthwhile to broadcast on Betaville.
Last week, at least one expert predicted that the confectioner would have trouble selling in the past.Ken Goldman, an analyst at JPMorgan, told Markets Insider that a sale is improbable for a number of reasons, including multiple failed takeover efforts in the past.
In addition to the prior Mondelez offer, Hershey took into consideration a $12.5 billion cash and equity offer from Wm. Wrigley Jr. Co. in 2002. However, under the domineering Hershey Trust, the business withdrew from the agreement due to criticism from the community, former students of Milton Hershey School, and even the Pennsylvania Attorney General.
Reports that Nestle SA and Cadbury Schweppes PLC were considering a joint attempt to purchase Hershey appeared that same year.
In addition, Goldman mentioned the Hershey Trust, the company’s dual-class ownership structure, and a law that grants the Pennsylvania Attorney General’s Office control over a sale.
The Milton Hershey School Trust held almost 99.9% of the company’s Class B shares as of 2023, which gave the trust roughly 80% of the voting power.
The trust’s governance was altered in 2016 by a set of revisions issued by the Pennsylvania AG’s Office.In addition to establishing base salary for board members, the reforms also created guidelines for how trustees handle conflicts of interest and how the trust and school purchase and sell land.
If a Hershey Co. transaction doesn’t make financial sense, the AG can stop it according to the revisions.
Due to sluggish consumer spending and rising cocoa prices, Hershey reported third-quarter profits in November that were below expectations. Revenue dropped 1.4% to $2.9 billion, while adjusted profits per share for the period were $2.34.
According to Bloomberg, Mondelez wants to grow its snack business and is open to mergers.
Stories by
Sue Gleiter
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