Hershey's logo, taken in Manhattan.
Michael Kapler | Image Alliance | Getty Images
shares Hershey It rose as much as 15% in morning trading on Monday after Bloomberg reported it Mondelez Trying to take over another chocolate company.
Hershey's stock has risen 7% this year, raising its market value to $40.49 billion. Before Monday's move, shares were down 6% this year, hurt by concerns about rising use of GLP-1 drugs and rising cocoa prices.
Mondelez's share fell 2% in morning trading. The company's shares fell by 15% this year, bringing its market value to $82.22 billion.
Hershey shares are having their best day since June 30, 2016, when the stock rose more than 16% after the company publicly disclosed a $23 billion bid from Mondelez, which owns Oreo, Cadbury and Honeymed. Hershey's board of directors unanimously rejected the offer, and Mondelez announced in August of that year that it would abandon its pursuit of a deal.
Since its founding in 1894 by Milton Hershey, the company has remained independent, despite takeover attempts and even a strategic review in 2007 by its board of directors.
Hershey's two-class structure gives holders of its Class B common stock, which is largely held by the Hershey Trust Company, 10 votes per share. As a result, the Hershey Trust has “significant control” over the company's future, according to a research note from JPMorgan analyst Ken Goldman published Wednesday.
Pennsylvania law also gives the state attorney general the authority to broker any deal that takes away the power of trust.
This is what happened in 2002, after Hershey Trust announced that it planned to sell its controlling stake in the company to Wrigley. After criticism from the public, the district attorney intervened 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 left.
Consumer packaged goods companies are looking for deals to boost their sales after years of rising prices squeezed demand for their existing brands. For example, Mars, which owns M&M's, bought Kellanova, the maker of Pringles potato chips, this summer for $36 billion.
