Hershey’s logo, photographed in Manhattan.
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shares hershey Gains as high as 15% in early trading on Monday Bloomberg reports That Mondelez is trying to acquire the chocolate company again.
Hershey’s shares are up 7% this year, giving it a market value of $40.49 billion. Before Monday’s action, shares had fallen 6% this year on concerns about increased use of GLP-1 drugs and soaring cocoa prices.
Mondelēz International shares fell 2% in early trading. The company’s shares have fallen 15% this year, with its market value falling to $82.22 billion.
Hershey shares are having their best day since June 30, 2016, when the company publicly disclosed a $23 billion bid from Mondelez, which owns Oreo, Cadbury and Honey Maid, which has gained more than 16% in that time. Hershey’s board unanimously rejected the proposal, and Mondelez announced in August of that year that it was giving up pursuing a deal.
The company has remained independent since its founding in 1894 by Milton Hershey, despite numerous takeover attempts by the board and even a strategy review in 2007.
Hershey’s dual-class structure entitles holders of its Class B common stock (mainly held by the Hershey Trust) to 10 votes per share. As a result, Hershey Trust has “substantial control” over the company’s future, according to a research note released Wednesday by J.P. Morgan analyst Ken Goldman.
Pennsylvania law also gives the state’s attorney general the power to mediate any transaction that deprives the trust of its powers.
That’s what happened in 2002, when Hershey Trust announced plans to sell its controlling stake in the company to Wrigley. After public criticism, the attorney general stepped in to block the sale through the Dauphin County Orphans Court, which resolves legal issues related to charitable trusts, and 10 of the trust’s 17 board members resigned.
Years of price increases have put pressure on demand for existing brands, and consumer goods companies have been seeking deals to boost sales. For example, M&M’s owner Mars bought Pringles potato chip maker Kellanova this summer for $36 billion.
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