Hershey rejected that $23 billion bid, and Mondelez said further talks were unsuccessful. A deal would have been subject to the Hershey Trust, a controlling shareholder.
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Last week Hershey declined the latest Mondelez bid its second in the past three months. With weak stock performance and meek historical growth numbers, Hershey couldn’t have contributed enough synergies to justify the multi-billion dollar deal price.
Democrat candidate Josh Shapiro has said he will “vigorously protect Hershey’s continued success in Pennsylvania” and protect it from “multi-national corporations and Wall Street investors willing to destroy Pennsylvania jobs for their own profit”. An unfavorable de-rating Hershey shares are trading down in Monday’s after-hours ($98-99 per share).
Long Island native Rosenfeld was likely restrained from making a sweeter offer by board member and shareholder activist Nelson Peltz, who is not so interested in protecting Rosenfeld, but instead in raising Mondelez’s share price, a food banker said.
WSJ reported Hershey indicated no deal would be possible before a reconstitution of the Hershey Trust Co., which isn’t expected to happen until sometime next year. Investors were gleeful, too – Mondelez’ shares rose almost 4% yesterday.
Hershey slumped 11 percent and Mondelez rose 4 percent Tuesday after Mondelez, which makes Oreo cookies and other products, said it would no longer pursue a combination with Hershey.
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Hershey Trust Co.is in the midst of reconstitution of its board of directors after they were alleged for profligacy, disregard for term limits, and self-dealing. A merger between Mondelez and Hershey would have created the largest confectioner in the world, jumping the current leader, Mars Inc., for the top spot. Hershey was looking for a bid of at least $125 (£96) a share. Under that deal, five current members, including Chairwoman Velma Redmond, will retire through December 31, 2017. Even if Mondelez were able to bring Hershey to a consensus, the amalgamation of the two companies wouldn’t have made so much sense, especially given the high-calorie food Hershey is known to sell.
