Preview Newsletter

Hershey Media Report 7/25/16

    National Coverage

  1. The Morning Risk Report

    Jul 25, 2016 | Wall Street Journal

    By Ben Dipietro

    The reported settlement with the OAG was discussed in the Wall Street Journal's Morning Risk Report. Relevant portion pasted below.

    2. Trade Coverage

  2. Reports: Hershey Trust reaches overhaul deal with AG's office

    Jul 25, 2016 | Central Penn Business Journal

    By Roger DuPuis

    The Hershey Trust Co. has reached a deal with the Pennsylvania Attorney General's Office over changes to the trust's governance and compensation, but formal details of the deal have yet to be finalized or released.
  3. Hershey Trust's settlement with PA attorney general makes future questionable

    Jul 25, 2016 | Food Dive

    By Carolyn Heneghan

    Hershey Trust Co., Hershey's largest stakeholder, has agreed to settlement terms with Pennsylvania's attorney general, who has been investigating the trust's board on accusations of overcompensation and conflicts of interest.

    4. Broadcast Coverage

  4. Bloomberg Go Video Clip

    Jul 25, 2016 | Bloomberg Go

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570126?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14
  5. Squawk Box Video Clip

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570257?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14
  6. Worldwide Exchange

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570291?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14
  7. Options Action

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570319?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14

    8. Full Text of Stories Below

    National Coverage

  1. The Morning Risk Report

    Jul 25, 2016 | Wall Street Journal

    By Ben Dipietro

    Hershey Trust nears settlement. Hershey Co.’s largest shareholder–a trust that oversees billions of dollars for a local, nonprofit school — has agreed to make significant governance changes that could affect the future of the chocolate company, people familiar with the matter told the WSJ. Hershey Trust Co. has agreed on terms of a settlement with Pennsylvania’s top law-enforcement officer, which has been investigating the trust board over allegations of excessive compensation and conflicts of interest. The parties are in the process of drafting a legal document outlining the terms, which will lead to resignations of some trust board members, these people said. The settlement would include enforcing a cap on compensation and term limits of board members, according to these people. “There is no final agreement, but we have been having productive conversations with the attorney general’s office,” a spokesman for the trust said Friday.

    Return to headline | Return to top

    2. Trade Coverage

  2. Reports: Hershey Trust reaches overhaul deal with AG's office

    Jul 25, 2016 | Central Penn Business Journal

    By Roger DuPuis

    The Hershey Trust Co. has reached a deal with the Pennsylvania Attorney General's Office over changes to the trust's governance and compensation, but formal details of the deal have yet to be finalized or released.

    Several media outlets reported on the tentative agreement based on internal sources and documents, but the final outcome has yet to be confirmed by the trust or AG's office officials.

    The trust is The Hershey Co.'s main stockholder, controlling more than 80 percent of the company's voting shares — which gives the body significant leverage over any possible sale of the Dauphin County candy company.

    Three members of the trust's board also sit on the board of Dauphin County-based Hershey Co., whose board on June 30 rejected a $23 billion purchase proposal from Illinois-based Mondelez International, a Kraft Foods spinoff whose brands include Oreo Cookies.

    But the 10-member trust, whose purview includes the Milton Hershey School Trust, The M.S. Hershey Foundation Trust and the Hershey Cemetery Trust, has been under scrutiny from the AG's office over issues including how much its members are paid, how long they serve and questions about their expenses.

    AG's office spokesman Jeffrey A. Johnson this morning said the office is still working to finalize an agreement, but did release a statement from First Deputy Attorney General Bruce L. Castor Jr.

    "[Thursday], I met with board members and a lawyer for the Trust, along with our people, and I agreed on behalf of the Attorney General in principal to a series of changes that the Trust would implement. When that is reduced to writing, and if it is signed by us and them, Pennsylvania Attorney General Kathleen Kane will make the terms public," Castor said.

    While the terms of any deal have not been formally released, the Wall Street Journal reported on the tentative details based on inside sources, who told the paper the deal would see several board members leave at year's end.

    Hershey Trust Co. trustee Joan Steel resigned earlier this month, although no reason was given for her departure. Reuters reported that she was the fourth trust member to resign since last year.

    Milton Hershey, who founded the chocolate company that bears his name, established the trust in 1905.

    Return to headline | Return to top

  3. Hershey Trust's settlement with PA attorney general makes future questionable

    Jul 25, 2016 | Food Dive

    By Carolyn Heneghan

    Dive Brief:Hershey Trust Co., Hershey's largest stakeholder, has agreed to settlement terms with Pennsylvania's attorney general, who has been investigating the trust's board on accusations of overcompensation and conflicts of interest.Both parties are drafting the legal outline of the settlement terms, which include resignations of three trust board members by the end of the year, people familiar with the matter told Reuters.A shakeup at the board level of the trust, which controls 81% of Hershey's voting power, could impact the future of the company, particularly regarding a potential sale. Hershey turned down a $23 billion takeover offer from Mondelez earlier this month.Dive Insight:

    Experts believe that an overhaul of the trust's board, three members of which sit on Hershey's corporate board, could influence future decisions on takeover bids by Mondelez or any other company. Nestle and Kraft Heinz have both surfaced as speculated potential buyers. 

    But analysts believe that Mondelez is likely to return with a higher offer once the dust settles from the investigation and the trust's negotiations with the attorney general. Mondelez could have more leverage with new faces on the board, particularly if they don't have personal ties to the state.

    However, a new set of trust board members isn't enough to make a Hershey sale a done deal for any buyer. The trust is legally obligated to act in the best interests of the Milton Hershey School for underprivileged children, which operates on proceeds from the trust’s investments. Experts argue that a sale could benefit the school through diversification of the trust’s assets, which currently depend heavily on Hershey's stock and profits.

    The Pennsylvania attorney general has final say on any deal regarding a sale of the company. The AG's office has oversight powers over the Hershey Trust and can bring the issue to court if the office believes the deal could negatively impact the local economy.

    However, even that scenario isn't clear-cut. The current AG'slegal license was revoked, and she will not be running for re-election in November, Reuters reported. If Mondelez or another buyer puts in a higher offer, she wouldn't have to answer to voters for her final decision in the upcoming election.

    Return to headline | Return to top

    4. Broadcast Coverage

  4. Bloomberg Go Video Clip

    Jul 25, 2016 | Bloomberg Go

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570126?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14

    Rough transcript: another company that's moving hershey, well their trust which is a 12 billion dollar trust that controls the company, president controlled the company has a one percent voting rights one that now on more than one and half for the company and new with the pennsylvania attorney general to re forming governance

    Return to headline | Return to top

  5. Squawk Box Video Clip

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570257?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14

    Rough transcript: the hershey trust has agreed to make significant government changes according to dow jones. those could boost chances for previously rejected $23 billion takeover bid for hershey by Mondelez international. 

    Return to headline | Return to top

  6. Worldwide Exchange

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570291?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14

    Rough transcript: more stocks to watch hershey reached a deal with the Pennsylvania attorney general to settle a trouble that includes board resignations. makes a $23 billion offer for it, they control the chocolate maker through super voting shares. 1% move in hershey this morning. 

    Return to headline | Return to top

  7. Options Action

    Jul 25, 2016 | CNBC

    View clip here: http://beta.criticalmention.com/app/#clip/view/23570319?token=9ae5b4e9-5d55-4dd3-b9a2-44441cd1ff14

    Rough transcript: ews alert on hershey? >> that's right, dow jones is quoting sources reporting hershey trust has reached a settlement with pennsylvania's attorney general over a corporate governance probe which included allegations of unfair compensation of specific board members. the settlement would reportedly lead to resignations of some trust board members from the hershey trust which is not only a $12 billion charity, but it's also the largest shareholder of hershey at 34%. the settlement could potentially raise a likelihood of a deal with the chocolatemaker. we know someone showed interest but hershey rejected that $23 billion takeover. we'll see if this leads to a potential mna in the cards. >> thank you very much. difficult call whether it would follow through. >> one then that's important, we know mondelez's bid or the rumor came out, the stock went from the mid 90s to 115 or something like that. the fact that the stock remained bid around 110 leads you to believe people think there's a chance. so maybe this helps that process. >> would you agree? >> i mean, one thing is the valuation here is pretty heady, although unlike some other staples areas they don't have any exposure outside the united states. which makes it favorable especially for people who are concerned about the effects of a strengthening dollar. one other point i would make is that there's been a lot of scrutiny of the board of directors of this trust for some time. even once you get rid of a couple of problematic participants on the board, you still have the state to contend with. because the trust is supposed to benefit the school that hershey was intending to endow. i don't know that this is going to clear the way and the board's going to rubber stamp mondelez's bid or anybody else's because they said no to prior bids they've received. one thing that is the implied volatility in hershey's is still a little bit elevated after that bid was announced.

    Return to headline | Return to top

    8. Full Text of Stories Below

Add recipients

Suggested