Is Hershey Foods going to be sold?
- Thread starter Michael.Felli
- Start date
I hope not, although I could see potentially the argument. In general, candy consumption is down based on health considerations of the modern generation and I don't see that trend reversing. If anything, it will continue to decline. So Hershey has to start to diversify into other foodstuffs to survive, ie...the new Krave beef jerky. But moving into other snack foods is not simple, cost money, and has risk. Selling out to a bigger company ends all of that.
I think it would be really bad for Hershey and PA. Hershey obviously employs a ton of people and although their board is crooked, they are generally a pretty good corporate citizen. If they are taken over by a Mars or Nestle I would foresee some of the corporate people in Hershey being laid off in signficant numbers and potentially some factory shutdowns in PA. So both not good things for PA.
I think it would be really bad for Hershey and PA. Hershey obviously employs a ton of people and although their board is crooked, they are generally a pretty good corporate citizen. If they are taken over by a Mars or Nestle I would foresee some of the corporate people in Hershey being laid off in signficant numbers and potentially some factory shutdowns in PA. So both not good things for PA.
The kicker here is that the Hershey Trust Board has an almost 80% controlling interest in Hershey Foods as part of their fiduciary duty to the Hershey School. The company making the offer is taking advantage of the Hershey Trust Board turmoil and the PA AG investigation into the Board's possible fiduciary breach to take a shot. Who knows?
Frankly, I'd expect the company to leave Hershey except for perhaps their Disneyfied "Chocolate World". It's what happened in Latrobe with Rolling Rock, for example.
The company that is looking to buy Hershey is about 4 times bigger than Hershey. They make Cadbury and Oreos, among other foods. Their deal is that they would move their corporate headquarters to Hershey and change their name to Hershey. A lot of money in the Hershey name. About $21 billion at stake.
LINK: Hershey rejects offer
Shares in the Hershey Co. candy giant were surging on Thursday on reports that Oreo maker Mondelez International Inc. has made an offer to acquire the central Pennsylvania company.
At around 12:30, Hershey Co. shares had jumped $14.55 to $111.69.
But at around 2:30 pm., trading was halted as Hershey said its board has unanimously rejected a takeover offer from Mondelez and that it provided "no basis for further discussion."
Shares in the Hershey Co. candy giant were surging on Thursday on reports that Oreo maker Mondelez International Inc. has made an offer to acquire the central Pennsylvania company.
At around 12:30, Hershey Co. shares had jumped $14.55 to $111.69.
But at around 2:30 pm., trading was halted as Hershey said its board has unanimously rejected a takeover offer from Mondelez and that it provided "no basis for further discussion."
It would devastate Hershey and Central PA. Hershey largest employer after Commonwealth of PA and Hershey Medical Center.
The company is Mendelez, aka Kraft Foods.
I would vote to sell at $100,000 per share and the proviso that buyer would have to operate all PA plants at least at current levels for at least 100 years or pay unemployment and benefits to the employees for the rest of their lives.
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Mike Fisher, PA AG at the time (2002), got involved and sued to stop the deal. Wrigley was the suitor. He contended that any PA charitable trust has an unnamed beneficiary, the at large public of the PA communities it serves. Also, there was a fairly large protest from the public. It got ugly and the Hershey Trust Board gave up on the sale that they were ready to accept. It was almost a done deal.
LINK: Hershey Trust Halts Auction Despite Offer of $12 Billion
Leroy Zimmerman took over, so to speak, in late 2002 after the failed sale.
LINK: A look at the Hershey Trust
How Hershey charity director fees rose to half a million
When Leroy S. Zimmerman was named in late 2002 to the board of the small state-chartered Pennsylvania bank that managed the assets of the Hershey charity for disadvantaged youth, the post paid about $35,000 a year and came with restrictions. Within four years, changes at the state level allowed him to add more Hershey-related boards to his resume - and increase his annual fees to $500,000.
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other than the fact that the combined companies' headquarters would remain in Hershey you're spot on.. .congrats.
Mike Fisher also got the ball rolling when he suggested that the Hershey trust diversify. When that fell flat, he jumped to the other side of the issue due to the unpopularity. He was making a run for governor.
Mondelez is only the chocolate and snack foods business lines that were spun off of what was formerly Kraft. The remainder currently operates together with what was formerly HJ Heinz as Kraft Heinz, owned by 3G and Berkshire Hathaway.
