Hershey Foods Corp. apparently has abandoned any plans for a sale. Hershey rejected a last-minute, $12.5 billion offer from Wm. Wrigley Jr. Co. that included a guarantee that Hershey, PA-based factories would stay open. The offer was a 42-percent premium over Hershey’s existing stock price (and $2 billion more that what was offered jointly by Nestle and Cadbury-Schweppes, the previous frontrunners) and would have prompted a dramatic transformation for Chicago-based Wrigley, which would have been called Wrigley Hershey.
Hershey stock dropped 13 percent to $64.16 after the announcement. A stock repurchase plan was reported, but Hershey Foods says it has not been approached about the idea by the Milton Hershey School Trust, which owns 77 percent of the company. The trust put the company on the block earlier this summer, only to be met with an avalanche of opposition from the Hershey community, which feared an outside buyer would close factories. Pennsylvania Attorney General Mike Fisher (a candidate for governor who proposed that the trust diversify its assets last year) became the sale’s most public critic. Judge Warren Morgan had issued a temporary injunction blocking the sale.
Industry observers expected the ruling to be overturned and for the trust to continue seeking bids. In the meantime, the future of Hershey Foods stays in limbo.
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