Amid changing consumer preferences for more organic, healthier and natural foods, Hershey’s product portfolio of peanut butter cups and chocolate bars wouldn’t have swung the revenue needle for Mondelez. But sources talking to national reporters behind the scenes seem to be. Hershey also indicated that the trust that controls the company, which has been in turmoil, would need to complete a reconstitution before there could be a deal-something unlikely to happen until next year, this person added.
“The company’s board of directors and management team are committed to enhancing value for all stockholders in accordance with the company’s strategic plan”, Hershey said at the time of the offer.
Hershey generated nearly 90 percent of its revenue in North America previous year, with the majority of that coming from selling chocolate in the U.S. Mondelez, meanwhile, has suffered from currency fluctuations and slowing overseas economies.
About 80% of voting shares are controlled by the Hershey Trust Co. Hershey’s board said on June 30 that it unanimously rejected that bid. Mondelez was reportedly willing to go as high as $115, but Hershey wouldn’t budge on its asking price. “Beyond this, we are providing no further comments”.
From a strategic perspective, we haven’t wavered from our stance that a deal could have been advantageous for both firms, affording Mondelez entry into the attractive USA chocolate space while also facilitating Hershey’s expansion beyond its home turf. An unfavorable de-rating Hershey shares are trading down in Monday’s after-hours ($98-99 per share). Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Mondelez’s shares, on the other hand, rose 3% as investors seemed happy with the development. That stock stood at $44.67 at mid-morning.
Hershey shares soared to all-time highs back in June after Mondelez, the self-proclaimed world leader in “snacking”, offered to take over the company in a cash and stock deal worth almost $23 billion.
Here’s what Reuters had to say about the story, and here is Fortune’s report.