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Hershey Media Report 8/3/16
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Inquirer editorial: How a Hershey's kiss embodies the Kathleen Kane era
Aug 3, 2016 | Philadelphia Inquirer
The perpetually wayward Hershey Trust was an early focus of candidate Kathleen Kane's vows to be a tough top prosecutor. Her subsequent settlement with the chocolate-fueled charity as a newly minted attorney general - a capitulation that possessed all the toughness of a peanut butter cup - was one of the first signs that she would not live up to her promises. -
Will last week's agreement end problems at Hershey Trust? Critics doubt it
Aug 2, 2016 | Lancaster Online
By Tim Stuhldreher
Will the deal reached last Friday between the Hershey Trust and the Pennsylvania Attorney General's office end the scandals that have plagued the $12 billion nonprofit in recent years? And what does it mean for the attempt by Mondelez International, the maker of Oreos and other products, to acquire the Hershey Co., which the trust controls? -
Hershey Stock Rebounds after Rejecting Mondelez’s Offer
Aug 2, 2016 | Market Realist
By Sue Miller
Hershey (HSY) reported its fiscal 2Q16 earnings results on July 28, 2016. The stock reacted to strong second-quarter results and rose 3% to $111.35 that day. Earnings and revenue exceeded estimates for the quarter. However, it closed 1% lower on July 29, 2016, at $110.76. -
Squawk on the Street
Aug 3, 2016 | CNBC
View clip here: http://beta.criticalmention.com/app/#clip/view/23691247?token=54ddbf65-78ff-4b6b-8d4c-4530e99f8031
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Inquirer editorial: How a Hershey's kiss embodies the Kathleen Kane era
Aug 3, 2016 | Philadelphia Inquirer
The perpetually wayward Hershey Trust was an early focus of candidate Kathleen Kane's vows to be a tough top prosecutor. Her subsequent settlement with the chocolate-fueled charity as a newly minted attorney general - a capitulation that possessed all the toughness of a peanut butter cup - was one of the first signs that she would not live up to her promises.
It's fitting, then, that here at the bitter end of her tenure, Kane has just signed off on what appears to be another sweet deal for Hershey, as the Inquirer's Bob Fernandez reported last week. It's one more reminder - and one of the last, one hopes - of the sheer emptiness of the bluster with which Kane sought and has conducted herself in office.
As it happens, the Democrat announced her latest prosecutorial abdication the same week that a judge rebuffed an effort to derail Kane's own prosecution on charges that she leaked grand jury information to smear a rival. Montgomery County Judge Wendy Demchik-Alloy ruled that a trove of profane official emails discovered by Kane's office cannot be introduced at her trial, which is scheduled to begin next week if the state Supreme Court denies a last-ditch appeal.
The pornographic and bigoted emails raised troubling questions about the judges, prosecutors, and other officials who exchanged them, some of whom were deservedly expelled from the state payroll. Ever since Kane happened upon the inappropriate communications in the course of another investigation, however, she has released them selectively to distract from her own shortcomings. Meanwhile, she has yet to produce the results of a long-promised comprehensive investigation of the material.
This pattern of spectacle without substance emerged with Kane's approach to the Hershey Trust. She is not the first attorney general who failed to rein in the extraordinarily wealthy, politically connected charity, which controls the company of the same name and runs a boarding school for needy children according to the wishes of candy magnate Milton Hershey. But Kane distinguished herself during the 2012 campaign by taking issue with Republican opponent David Freed's relation by marriage to a former chairman of the trust. When Freed promised to address the conflict by turning the matter over to a special prosecutor, Kane retorted, "I am an independent prosecutor, and Mr. Freed would have to hire one."
The following year, Kane absolved Hershey officials of any wrongdoing in a pair of dubious real estate purchases in exchange for vague promises to undertake modest reforms. Much like her failure to prosecute Democratic legislators caught taking cash from an informant, Kane's latest deal with Hershey is in the same conciliatory spirit. Despite extensive evidence of extravagant executive salaries and expenses, it requires only that five board members resign through next year and does little to preclude future abuses.
Because Kane was stripped of her law license in the wake of the criminal charges against her, her deputy, Bruce Castor, had to sign off on the deal. Given her campaign-season one-liner, it's an irony that Kane is the one who had to hire a prosecutor - and that the commonwealth will be deprived of one until the merciful end of her tenure.
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Will last week's agreement end problems at Hershey Trust? Critics doubt it
Aug 2, 2016 | Lancaster Online
By Tim Stuhldreher
Will the deal reached last Friday between the Hershey Trust and the Pennsylvania Attorney General's office end the scandals that have plagued the $12 billion nonprofit in recent years?
And what does it mean for the attempt by Mondelez International, the maker of Oreos and other products, to acquire the Hershey Co., which the trust controls?
To the trust's critics, Friday's agreement "changed nothing of substance and failed to address the systemic issues," according to a lengthy New York Times "Dealbook" article published Sunday.
The article details a series of missteps and accusations of corruption, including an internal memo by the trust's former chief compliance officer, Marc Woolley, in which one board member accuses several others of a "smear campaign" and insider trading.
The Times quotes Georgetown University scholar Pablo Eisenberg, who says of overall conditions at the trust: "I don't think I've seen a greater nonprofit scandal in the last 30 or 40 years."
As the Times notes, the ownership structure that Hershey Co. founder Milton Hershey left behind is unusual: The nonprofit Milton S. Hershey School for disadvantaged children owns the Hershey Trust, a controlling interest in the Hershey Co. candy company and the Hershey Entertainment and Resorts Co., which runs Hersheypark. They are all for-profit companies and share board membership.
Even more unusual: Back in 2002, when the school proposed having the trust sell Hershey, the state passed a law requiring any such sale to be approved by the attorney general.
"While arguably a boon for the (Hershey) community, the law, according to Robert H. Sitkoff, a professor at Harvard Law School, was also indefensible," the Times said.
A major scandal began in 2006, when the trust purchased a local golf course for much more than its appraised value. The deal prevented investors in the course from sustaining losses. Among the investors was Hershey Co. CEO Richard Lenny, who was on the Trust board at the time.
The deal was "a public relations disaster," the Times reports, and led in 2010 to an investigation by then state Attorney General Tom Corbett. In 2013, current Attorney General Kathleen Kane found no wrongdoing, but required the trust to agree to various governance reforms.
"Critics said there were no teeth in the agreement struck with the trust in 2013, which is why a do-over was required on Friday," the Times said.
Kane, of course, faces legal troubles of her own. Critics remain skeptical of Friday's agreement, and of the ability of trust board members to act responsibly, the Times reports.
The full Times article is available here.
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Hershey Stock Rebounds after Rejecting Mondelez’s Offer
Aug 2, 2016 | Market Realist
By Sue Miller
Impressive share price appreciationHershey (HSY) reported its fiscal 2Q16 earnings results on July 28, 2016. The stock reacted to strong second-quarter results and rose 3% to $111.35 that day. Earnings and revenue exceeded estimates for the quarter. However, it closed 1% lower on July 29, 2016, at $110.76.
Since the takeover news by Mondelez on June 30, 2016, Hershey stock has fallen 2%. However, as of July 29, 2016, Hershey stock has risen 26% in 2016. To know more about why Hershey rejected the offer, read No Thanks! Hershey Rejects Mondelez’s Takeover Bid.
Hershey stock has risen 24% since its 1Q16 release on April 26, 2016. As of July 29, 2016, Hershey outperformed the Market, represented by the S&P 500 Index (SPY), by 10%. The stock lost 14% in 2015.Peer stock performance
Kraft Heinz (KHC) has returned 19%, and Kellogg (K) has returned 15% so far in 2016. Hershey is part of the Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) and the Consumer Staples Select Sector SPDR ETF (XLP), which holds ~4% in HSY.About Hershey
Hershey is the largest producer of chocolate in North America. It’s a global leader in chocolate and non-chocolate confectionery. It operates under 80 brands in 70 countries worldwide.
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Aug 3, 2016 | CNBC
View clip here: http://beta.criticalmention.com/app/#clip/view/23691247?token=54ddbf65-78ff-4b6b-8d4c-4530e99f8031
Rough transcript: david, i always turn to you, at this time and ask you, isn't it possible, a la mondelez, hershey, whatever, that a banker could be talking. wouldn't you pitch that? you'd be on biogen's leader list. >> bankers talk all the time about the potential for consolidation in industries and they're happy to sort of discuss it. you can't take that as meaning anything.
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