In June, Hershey revealed that its controlling shareholder, the Hershey Trust, had rejected a preliminary takeover bid from Mondelez International valued at roughly $22.3bn.
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Hershey Trust, which wields 81 per cent of the voting power of Hershey shares, has historically been a thorn in numerous company’s deal-making efforts.
Shares of Mondelez, the maker of Oreo cookies and Cadbury chocolates, rose almost 4 percent in extended trading on Monday, while Hershey’s shares plunged about 12 percent.
After a takeover chase lasting more than two months, Mondelez would not raise its offer to the starting bid of $125 a share that insiders said Hershey was demanding. The chocolate maker also said that the trust would have to complete a full reconstitution prior to a deal being made, and that was not expected to take place until late in 2017 or later.
Confectionery major Mondelez has abandoned talks to buy candymaker Hershey, two months after the U.S. chocolate company turned down its $23 billion cash-and-stock bid.
The owner of Cadbury’s and Oreo has abandoned an £18bn ($23bn) offer for Hershey. According to WSJ, Ms. Rosenfeld last week privately indicated to CEO of Hershey, J.P. Bilbrey that Mondelez was willing to increase the offer to $115 per share.
Hershey Trust, a charity which has previously fended off sales of the company, holds 80% of the voting rights in Hershey.
ScanSource cited “organic growth and margin challenges in the second half” of the year, and had a “disappointing finish to fiscal year 2016 with sales and EPS below our expectations due to lower sales volume and lower gross margins”.
With the combination of the forced resignations and expected new members, the charity’s board will have a new majority by 2018.
The attorney general accused the trust of misconduct for overpaying its directors.
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In a letter to his investors earlier this month, Ackman wrote that Mondelez shares are now undervalued, and that the issuance of Mondelez stock to fund the acquisition of Hershey would likely be costly for Mondelez shareholders. Even with this news, we don’t intend to change our $48 and $105 fair value estimates for Mondelez and Hershey, respectively.
