Shares in Hershey rose in early trading in New York today (9 December) after a report said Mondelez International had made a fresh move for its rival confectioner.
Bloomberg reported Cadbury owner Mondelez had made what the news outlet called a “preliminary approach” to buy Hershey.
Citing unnamed sources whom Bloomberg described as “familiar with the matter”, the publication said Mondelez had approached the Reese’s maker over a “possible combination”.
A deal would create the world’s largest chocolate maker and a business home to brands including Cadbury, Reese’s, Milka and Hershey’s Kisses.
Approached by Just Food, both Mondelez and Hershey declined to comment.
A Mondelez spokesperson said: “As a matter of policy, we don’t comment on market rumours and speculation.”
A spokesperson for Hershey said: “We don’t comment on market rumours or speculation.”
Shares in Hershey stood at $197.40 at 12:00 GMT, up 11.31%.
Mondelez’s share price had fallen 2.7% to $61.16 at 12:04 GMT.
Eight years ago, Hershey’s board “unanimously rejected” a takeover approach from Mondelez worth $107 a share, or $22.83bn. At the time, Hershey described the offer as a “mix of cash and stock consideration”, as well as “other non-monetary considerations”.
Hershey is controlled by Hershey Trust Co. In 1909, Hershey founder Milton S. Hershey and his wife Catherine set up a trust with the Milton Hershey School as its sole beneficiary.
Hershey Trust Co. is trustee of the Milton Hershey School Trust. As trustee for the Milton Hershey School Trust, Hershey Trust Co. is the snacks group's controlling stockholder and holds almost all its Class B common stock. It would need to approve any transaction with Mondelez.
In 2016, after having an initial bid rejected, Mondelez was reportedly ready to return with an offer worth $115 a share. At the time, The Wall Street Journal said Hershey rebuffed that idea but the publication claimed the company would start talking if an offer worth a minimum of $125 a share was tabled.
In the end, Mondelez walked away, with then chairman and CEO Irene Rosenfeld stating: “Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement.”
In 2002, Hershey Trust Co. rebuffed interest from the then Wrigley. Five years later, the Trust prevented merger talks with Cadbury (now owned by Mondelez) and, in 2010, the trust prevented the chocolate group from bidding for the then independent Cadbury when the UK company was facing a hostile takeover bid from what was then Kraft Foods – which then subsequently spun off Cadbury and its other snack assets into Mondelez.
