Hershey Media Report 7/7/16

Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Full Text of Stories Below

National Coverage

1. Stuff your face with food and beverage stocks

   Jul 7, 2016 | CNN Money

   By Paul R. La Monica
   
   
   Pepsi reported strong earnings Thursday morning and raised its guidance as well. Shares of the soft drink and snacks giant rose nearly 2.5% on the news ... to an all-time high.

Trade Coverage

2. Politics Could Foil Hershey Sale

   Jul 7, 2016 | CTFN M&A Reporting

   By Ed Roberts
   
   
   The fate of any sale of Hershey Co. could rely not on the decision of company directors, or even on the 107-year old charitable trust that holds voting control over the venerable chocolatier, but on the predilection of Pennsylvania voters who will choose a new AG this November.
3. Amid an Increase in Consumer Spending, This Is How Hedge Fund’s Favorite Consumer Stocks Performed in Q2

   Jul 7, 2016 | Insider Monkey

   By Raymond Jones
   
   
   Only relevant portion included: Mondelez International Inc (NASDAQ:MDLZ)’s stock ended the second quarter up by 13.43%, with some of those gains coming in on the last day of the quarter after news broke that the company had made a $107 per share bid for rival Hershey (NYSE:HSY). Though Hershey (NYSE:HSY) announced on the same day that its Board of Directors had unanimously rejected the bid, shares of both companies are still holding onto the gains they made on June 30, as market participants anticipate Mondelez making a higher bid for the company.

Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Full Text of Stories Below

National Coverage

1. Stuff your face with food and beverage stocks

   Jul 7, 2016 | CNN Money

   By Paul R. La Monica

   Pepsi reported strong earnings Thursday morning and raised its guidance as well.

   Shares of the soft drink and snacks giant rose nearly 2.5% on the news ... to an all-time high.

   And Pepsi (PEP) is not the only supermarket staple doing well.

   In the past week, shares of cereal kings General Mills (GIS), Kellogg (K) and Post (POST) have hit new records.

   So has Campbell Soup (CPB). And Smucker (SJM). And Pepsi rival Dr Pepper Snapple (DPS). And spice maker McCormick (MKC). And Gores Holdings (GRSH) -- the investment firm that's planning to buy Twinkie-maker Hostess and take it public.

   Then there's Warren Buffett's favorite food company -- Kraft Heinz (KHC). The ketchup and cheese maker is Berkshire Hathaway's (BRKB) largest holding. It's at an all-time high as well.

   Whew! I feel like I'm in a food coma after typing all that.

   It makes sense that the food and beverage companies are holding up nicely in a volatile market. (Forget about hopes of winning the Mega Millions jackpot. Companies like Kraft Heinz and Pepsi are already helping make savvy investors rich.)

   Most of the major food and beverage makers are still reporting decent, if not spectacular, sales and earnings growth -- despite concerns about Brexit impacting the global economy.

   The U.K. is Pepsi's fifth largest market, for example. So Brexit doesn't seem to be hurting demand for soda, Gatorade and potato chips.

   Many of the big brand name food and beverage companies also pay solid dividends. That makes them attractive at a time when yields for most major government bonds are extremely low -- and in some cases, negative.

   Finally, there's an M&A food frenzy to whet investors' appetites as well.

   French yogurt and dairy giant Danone (DANOY)announced plans Thursday to acquire organic food company WhiteWave Foods (WWAV) for about $12.5 billion -- including debt. WhiteWave surged nearly 20% on the news.

   WhiteWave rival Hain (HAIN) rose 10% as well on hopes it could be the next food company to get gobbled up by a larger rival.

   The Danone-WhiteWave deal comes just a week afterHershey (HSY) revealed that it had rejected takeover advances from Cadbury owner Mondelez(MDLZ).

   Many experts think Hershey could still be in play though.

   Heck, maybe Buffett could even come calling. After all, Berkshire helped back the Mars takeover of gum and candy maker Wrigley back in 2008. And Berkshire already owns See's Candies. We know Buffett -- also a big owner of Coke (KO) -- has a sweet tooth.

   But even if Hershey decides to remain independent, one thing remains clear. Investors haven't grown tired of stuffing their faces with food and beverage companies just yet.

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Trade Coverage

2. Politics Could Foil Hershey Sale

   Jul 7, 2016 | CTFN M&A Reporting

   By Ed Roberts

   Full Text Behind Paywall:

   The fate of any sale of Hershey Co. could rely not on the decision of company directors, or even on the 107-year old charitable trust that holds voting control over the venerable chocolatier, but on the predilection of Pennsylvania voters who will choose a new AG this November. 

   Candidates for the AG's office, enmeshed in turmoil with current officeholder Kathleen Kane who is under criminal

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3. Amid an Increase in Consumer Spending, This Is How Hedge Fund’s Favorite Consumer Stocks Performed in Q2

   Jul 7, 2016 | Insider Monkey

   By Raymond Jones

   Mondelez International Inc (NASDAQ:MDLZ)

    – Hedge Funds with Long Positions (as of March 31): 63

    – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $5.66 Billion

   Mondelez International Inc (NASDAQ:MDLZ)’s stock ended the second quarter up by 13.43%, with some of those gains coming in on the last day of the quarter after news broke that the company had made a $107 per share bid for rival Hershey (NYSE:HSY). Though Hershey (NYSE:HSY) announced on the same day that its Board of Directors had unanimously rejected the bid, shares of both companies are still holding onto the gains they made on June 30, as market participants anticipate Mondelez making a higher bid for the company. Mondelez has been working hard on increasing its operating margins for the past few quarters, the results of which were visible during its first quarter earnings release on April 27, when it revealed that its adjusted operating income margin grew by 2.40 percentage points year-over-year to 15.1%. In the January-to-March period, the ownership of Mondelez International Inc (NASDAQ:MDLZ) among the funds in our database increased by six, though the aggregate value of their holdings in the stock fell by $1 billion. Bill Ackman‘s Pershing Square reduced its stake in the company by 48% to just under 23 million shares during the quarter.

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