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Hershey Media Report 8/30/16

National Coverage

UPDATE: Mondelez Drops Offer for Hershey
Aug 29, 2016 | Wall Street Journal
By Annie Gasparro, Dana Cimilluca, and Tess Stynes

Oreo cookie maker Mondelez International Inc. ended its pursuit of Hershey Co. after the famed chocolatier rebuffed its latest acquisition offer, putting an end to a monthslong takeover campaign that would have created the world’s largest candy company.
Owner of Nabisco ends pursuit of Hershey
Aug 29, 2016 | New York Post
By Josh Kosman

Hershey has succeeded in giving Mondelez the big kiss-off. Mondelez, owner of Oreo, Nabisco and Cadbury, said Monday after market hours that it had ended discussions with Hershey about buying the business.
After-hours buzz: HSY, UAL, AAL & more
Aug 29, 2016 | CNBC
By Patti Domm

Brief mention of the rejected bid from Mondelez in CNBC's "Market Insider."

Trade Coverage

Mondelez/Hershey Deal Breaks - Is It Time For A Snack?
Aug 29, 2016 | Seeking Alpha

Mondelez (NASDAQ:MDLZ) has issued a press release stating the company will no longer pursue its acquisition of The Hershey Company (NYSE:HSY). Even with the topper bid to $115/share from Mondelez, it seemed unlikely that the Hershey trust would have been willing to part with the company, instead asking for $125/sh. The Hershey trust, the largest shareholder of Hershey Company with about 8% ownership, had opposed the sale in the past and was likely to remain a large obstacle to the transaction if the price was not met.
What's Mondelez's Next Move After Failed Fling With Hershey?
Aug 30, 2016 | The Street
By Bob O'Brien

Mondelez (MDLZ) said Monday what's as obvious as the nose on your face: its unrequited bid for Hershey (HSY) is over. Eighty-sixed. Dead as doornails. That's going to spur a lot of talk along the lines of: what is Mondelez going to do with the $23 billion it isn't going to spend on the chocolate maker?
Investors Should Consider Hershey After Mondelez Pulls Out
Aug 30, 2016 | Seeking Alpha
By Daniel Jones

At the start of July, I published an article on Seeking Alpha regarding The Hershey Company (NYSE:HSY) and the bid that Mondelez International (NASDAQ:MDLZ) placed for the entity. In my piece, I showed why Hershey made for a good prospect for Mondelez and I also stated that market participants expected a meaningfully higher price for the enterprise, but I did warn investors that anti-trust concerns, as well as issues regarding the Hershey Trust Company and Milton Hershey School, would make a transaction between the two uncertain.
Coverage: Mondelez walks away from Hershey
Aug 30, 2016 | Talking Biz News
By Chris Roush

Mondelez International Inc. ended its bid to acquire Hershey Co.after the famed chocolate-bar maker rebuffed a new takeover offer and indicated it would be difficult to strike a deal before next year.
Mondelez International Inc Backs Away From Hershey Co (HSY) Takeover Bid
Aug 30, 2016 | BidnessEtc

Mondelez yesterday gave up on its plans to take over Hershey Co.’s (NYSE:HSY), after pursing the chocolate maker for more than a month. Following the announcement, Hershey shares plunged more 11% in after-hours trading. Mondelez’s shares, on the other hand, rose 3% as investors seemed happy with the development.
Mondelez ends merger discussions with Hershey, leaving Mars' dominance in tact
Aug 30, 2016 | The Drum
By Tom Connelly

Discussions of a possible merger between Oreo owner Mondelez and The Hershey Company have ended after the two companies failed to come to an agreement.
Mondelez drops out of $23bn bid to acquire Hershey
Aug 30, 2016 | Food Business Review

American confectionery, food, and beverage company Mondelēz International has dropped out its $23bn bid to buy Hershey after its offer was rejected by chocolate maker.
Mondelez backs off from Hershey pursuit
Aug 30, 2016 | ShareCast

The owner of Cadbury chocolate has lost its interest in buying US confectionery company Hershey, after having two bids rebuffed in recent months. Mondelez International, one of the world's largest snack-makers, had put forward offers of $107 and $115 a share for Hershey, but the company's notoriously stringent board were uninterested, valuing the business at around $125 per share, according to the Financial Times.
Mondelez kisses its Hershey bid good-bye
Aug 30, 2016 | Ocular USA

Oreo cookie maker Mondelez International (MDLZ) says it has ended discussions of a possible merger with Hershey (HSY), a combination that would have created a global powerhouse selling some of the world’s best known chocolates and snacks.
Oreo cookie maker Mondelez abandons bid for Hershey
Aug 30, 2016 | Financial Spots
By Betsy Taylor

Mondelez International Inc, the maker of Oreo cookies and Cadbury chocolates, said on Monday it was "no longer pursuing" a merger with Hershey Co.
Mondelez abandons Hershey takeover plans after talks fail
Aug 30, 2016 | International Business Times
By Karthick Arvinth

Hershey's share price has plunged after rival Mondelez International announced it was no longer pursuing a merger with the US chocolate giant. In a statement released on 29 August, Mondelez said there was "no actionable path forward" towards reaching a merger agreement with Hershey, two months after it had a $23bn (£17.6bn) cash-and-stock offer rejected.
Mondelez Drops Hershey Bid
Aug 30, 2016 | Investor's Business Daily
By Elaine Low

The Oreos maker said after the market close that it is no longer looking to acquire chocolatier Hershey, sending shares of Mondelez up 3.4% in late trade and sinking the Kisses maker in the double digits.
Cadbury's Owner Abandons Hershey Takeover
Aug 30, 2016 | Sky News

The owner of Cadbury's and Oreo has abandoned an £18bn ($23bn) offer for Hershey. The deal would have created a global giant selling some of the world's best-known chocolates and snacks.
Why Mondelez gave up on acquiring Hershey
Aug 30, 2016 | Crain's Chicago Business
By Peter Frost

The deal just wasn't sweet enough—for either side. Mondelez International has ended its two-month flirtation with chocolate-maker Hershey, after the two companies were unable to agree to a purchase price.

International Coverage

Cadbury's owner Mondelez scraps takeover bid
Aug 30, 2016 | BBC News

Snacks giant Mondelez International is abandoning its takeover bid for American confectioner Hershey after its $23bn (£18bn) offer was rejected. The deal would have created the world's biggest maker of confectionery, but Hershey turned down the cash and stock offer in June.
Cadbury owner Mondelez abandons $23bn pursuit of Hershey
Aug 30, 2016 | The Telegraph
By Ashley Armstrong

Cadbury owner Mondelez has scrapped its pursuit of rival Hershey to create the world’s biggest chocolate company after failing to sweeten its $23bn (£17bn) offer enough to tempt its target to do a deal.
Mondelez Backs off from Hershey Pursuit
Aug 30, 2016 | LiveCharts.co.uk

The owner of Cadbury chocolate has lost its interest in buying US confectionery company Hershey, after having two bids rebuffed in recent months. Mondelez International, one of the world's largest snack-makers, had put forward offers of $107 and $115 a share for Hershey, but the company's notoriously stringent board were uninterested, valuing the business at around $125 per share, according to the Financial Times.
Cadbury's owner Mondelez passes on Hershey takeover as deal sours
Aug 30, 2016 | Evening Standard
By Lucy Tobin

After a takeover chase lasting more than two months, Mondelez would not raise its offer to the starting bid of $125 a share that insiders said Hershey was demanding. It had initially offered $107 per share and is thought to have gone up to $115 per share.
Mondelez drops takeover bid for US chocolate maker Hershey
Aug 30, 2016 | Progressive Grocer India

Confectionery major Mondelez has abandoned talks to buy candymaker Hershey, two months after the US chocolate company turned down its $23 billion cash-and-stock bid.

Broadcast Coverage

Squawk on the Street
Aug 30, 2016 | CNBC

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CNN Money with Maggie Lake
Aug 30, 2016 | CNN

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Varney & Company
Aug 30, 2016 | FBN

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Morning Express with Robin Meade
Aug 30, 2016 | CNNH

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Mornings with Maria Bartiromo
Aug 30, 2016 | FBN

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Morning Express with Robin Meade
Aug 30, 2016 | Talk News

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Morning Joe
Aug 30, 2016 |

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Squawk Box
Aug 30, 2016 | CNBC

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Full Text of Stories Below

National Coverage

UPDATE: Mondelez Drops Offer for Hershey

Aug 29, 2016 | Wall Street Journal

By Annie Gasparro, Dana Cimilluca, and Tess Stynes

Oreo cookie maker Mondelez International Inc. ended its pursuit of Hershey Co. after the famed chocolatier rebuffed its latest acquisition offer, putting an end to a monthslong takeover campaign that would have created the world’s largest candy company.
Hershey last week rebuffed a new bid by Mondelez, the second one since June, and indicated it would be difficult to strike a deal before next year because of the shifting dynamics at its controlling shareholder, the Hershey Trust Co., according to people familiar with the matter.
Mondelez said in a statement late Monday there was “no actionable path forward” to buy Hershey, which confirmed that there were additional communications with Mondelez but wouldn’t comment further.
Mondelez’s failure to pull off the takeover, which would likely have been valued at upward of $25 billion, will likely reinforce the notion among analysts and investors that Hershey is unattainable as an acquisition target in light of its majority ownership by a trust that for years has been reluctant to sell.
The Hershey Trust, which controls about 81% of Hershey’s shareholder votes, is in the midst of overhauling its own board of directors following an investigation by state regulators, and investors had wondered if Mondelez would be able to win its approval by striking during a period of uncertainty.
Mondelez Chief Executive Irene Rosenfeld walked away from her goal of creating a snacking and confectionary giant that would benefit from giant global scale and the combination of major brands like Chips Ahoy and Reese’s peanut butter cups.
Hershey’s stock dropped 12% after market hours Monday while shares of Mondelez rose 3.4%.
Mondelez initially made a roughly $23 billion bid for Hershey, The Wall Street Journal first reported in June. Hershey rejected the offer, which amounted to $107 a share, half in cash and half in stock.
Ms. Rosenfeld privately indicated to Hershey CEO J.P. Bilbrey last week a willingness to raise the bid to $115 a share, the people familiar with the matter said.
Hershey responded that the starting point for discussions would need to be $125 a share. Hershey also indicated that the trust would need to complete a reconstitution before there could be a deal, and that isn’t expected until possibly late next year, some of the people said.
Hershey, with a namesake hometown in Pennsylvania built by its success, and Deerfield, Ill.-based Mondelez, both have been under pressure in the U.S. amid a trend toward healthier eating.
Pablo Zuanic of Susquehanna estimated that had they merged, the combined company would see a sales increase of between 9% and 19%.
Mondelez could have helped Hershey expand overseas while Hershey’s U.S. chocolate prowess had the potential boost Mondelez domestically.
Hershey had $7.4 billion in annual sales last year, while Mondelez towered over it, with $30 billion
Hershey arguably had the most to gain from the hypothetical deal, in that it has been trying to diversify from its largely U.S. candy business, whose products include chocolate Kisses and Jolly Ranchers, to more international markets and new products sold in the broader snack aisle.
Both of those efforts would have been achieved swiftly with an acquisition by Mondelez, Mr. Zuanic noted.
If the outcome of the talks with Mondelez were to attract other bidders, they may need to be more patient than Mondelez.
The Hershey Trust, as part of a settlement with state regulators, isn’t likely to have a reconstituted board of directors until the end of 2017.
The trust, which oversees billions of dollars for a local, nonprofit school, has agreed to make significant governance changes in response to the Pennsylvania attorney general’s office investigation into allegations of excessive compensation and conflicts of interest.
“Once a totally new Trust Board is in place, by early 2018, things could be different, but we are uncertain Mondelez will exist in its current form by then,” Mr. Zuanic said in a note to investors earlier this month, hinting at the possibility that Mondelez would go after another smaller rival or become a takeover target itself.
Ms. Rosenfeld said in prepared remarks Monday that while the company was disappointed, it remains focused on its efforts to deliver sustainable sales growth and stronger margins. Mondelez will be disciplined in its approach to generating value, including through acquisitions, she added.
Indeed, Mondelez called off the pursuit because the deal was attractive but not essential and because it was eager to avoid overpaying, according to one of the people familiar with the matter.
Mondelez plans to provide more details at an industry conference on Sept. 7.
While the mergers-and-acquisitions market remains relatively healthy, the proposed combination isn’t the only one to have unraveled this year. In March, HoneywellInternational Inc. pulled the plug on its $90 billion bid for United Technologies Corp.and, in April, Pfizer Inc. walked away from its deal to buy Allergan PLC, which ranked as 2015’s largest deal.
Mondelez, meanwhile, is under pressure to cut costs and improve its lagging profit margin, with Nelson Peltz on its board and fellow activist investor Bill Ackman as a major shareholder. Those two are unlikely to support a bidding war that could distract Mondelez from its annual savings goals.
Engaging in a big deal with those pressures is never easy, and trying to convince a likely unwilling seller like the Hershey Trust made it even harder.

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Owner of Nabisco ends pursuit of Hershey

Aug 29, 2016 | New York Post

By Josh Kosman

Hershey has succeeded in giving Mondelez the big kiss-off.
Mondelez, owner of Oreo, Nabisco and Cadbury, said Monday after market hours that it had ended discussions with Hershey about buying the business.
The pullback means Mondelez — by not growing bigger — is a likely target for 3G Capital’s Kraft Heinz Co., bankers in the space said.
Mondelez Chief Executive Irene Rosenfeld went public in June with a hostile $23 billion offer to buy Hershey for $107 a share, considered a relatively small 10 percent premium to the stock price then. If she had succeeded, Mondelez would have become too large for Kraft Heinz to swallow.
Mondelez raised its offer last week by 7.5 percent to $115 a share, and Hershey rejected it as still far too low, saying it was seeking at least $125, according to The Wall Street Journal.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement,” Rosenfeld said.
Long Island native Rosenfeld was likely restrained from making a sweeter offer by board member and shareholder activist Nelson Peltz, who is not so interested in protecting Rosenfeld, but instead in raising Mondelez’s share price, a food banker said.
Mondelez’s shares rose 2.5 percent in after-hours trading, to $44.10. They have been basically flat for the last 12 months.
Hershey’s shares fell 11 percent in after-hours trading Monday, to $98.93.
Rosenfeld had been chairman and CEO of Mondelez predecessor Kraft since 2007, and kept those titles at Mondelez, the international side of the business, after Kraft split itself in two.
Since then, 3G-owned Heinz has acquired Kraft, and is looking for its next target, sources said.
A charitable trust controls 81 percent of Hershey’s voting shares and funds a charitable school for disadvantaged kids.
Earlier this month, the Hershey Trust, which has gone through several recent unrelated scandals, announced it was adding nine new board members by the end of next year, further complicating a potential sale.

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After-hours buzz: HSY, UAL, AAL & more

Aug 29, 2016 | CNBC

By Patti Domm

Shares of Hershey fell more than 11 percent after hours after Mondelez announced that it has ended discussions of a possible merger with Hershey, a combination that would have created a global powerhouse selling some of the world's best known chocolates and snacks.
In a statement, Mondelez CEO Irene Rosenfeld said the company decided "there is no actionable path forward toward an agreement" following additional discussions.

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Trade Coverage

Mondelez/Hershey Deal Breaks - Is It Time For A Snack?

Aug 29, 2016 | Seeking Alpha

Mondelez (NASDAQ:MDLZ) has issued a press release stating the company will no longer pursue its acquisition of The Hershey Company (NYSE:HSY). Even with the topper bid to $115/share from Mondelez, it seemed unlikely that the Hershey trust would have been willing to part with the company, instead asking for $125/sh. The Hershey trust, the largest shareholder of Hershey Company with about 8% ownership, had opposed the sale in the past and was likely to remain a large obstacle to the transaction if the price was not met.
As a result of the deal breaking, Hershey has given back about half of the takeout premium in after-market trading, falling 12% to about $99/sh. The result of the lower price is a higher yield, with the yield increasing to 2.5% from 2.2%. Now that Hershey's investment story will again be a standalone company, we think it's time to revisit the yield story.
Use of Cash: The use-of-cash test provides a visual overview of the various cash uses a company has been allocating cash towards. It shows the relative size of the cash uses versus the outstanding cash balance available to the company. It is a quick and simple way to view how the company has used its cash over the past 10 years, and is indicative of what the company may do in the next 10 years with its cash reserves. We examine dividend payments to all shareholders (including payments to preferred dividend holders) as well as net repurchases, which includes equity issued via stock option plans, etc., as well as interest payments on debt, this offers a more wholesome view of how the company allocates capital.
Over the past decade Hershey has been a great capital allocator, using cash flows to fund large share repurchases and maintain a growing dividend except in 2009 when the dividend stayed flat. The company is reasonably leveraged so the debt payments and interest payments are not particularly onerous.
Hershey still has $100M remaining on its share repurchase authorization, and we expect they will use it, especially given the share price decline over night and they were buying at higher prices in Q2. The repurchases over the quarter were simply to replace stock option dilution, so it's nothing to get excited about.
10-Year Dividend Yield and Payout Ratios: Higher dividends are great, but not if they come at the expense of dividend sustainability. Assessing the payout ratio is a key metric in determining the sustainability of a dividend, and is calculated as dividend per share dividend by earnings per share (DPS/EPS).
Like many companies, Hershey is saving capital in the tough times between 2008 and 2010, while still funding the dividend and increasing it in 2 out of 3 years they lost their status as a Dividend Aristocrat. See the current Dividend Aristocrat list here.
The dividend has increased over the past decade by more than 100%, from $1/sh in 2006 to $2.24 in 2015. Aside from the single year of stagnant growth in 2009 every year has seen an increase. The payout ratio has been in the 50% to 60% range for most of the decade, which is a reasonable level.
Long-term Dividend Growth: It is important to view dividend sustainability across market cycles, following the prolonged bull market we have seen in recent years it is necessary to look a bit further out to get a more balanced view of dividend sustainability.
As mentioned above, Hershey's has earned its place as a Dividend Aristocrat, but fell off the wagon in 2009. It's been a great dividend payer over the decades.
Over the past 35 years the dividend has grown at an annual rate averaging 11%, which is a very strong growth to maintain across decades. Now that Hershey will once again be investable as a standalone company, we expect to see them continue increasing the dividend by ~10% annually over the coming few years, as this will be supported by increasing cash flows.
Credit risks: One of the largest risks to dividend sustainability is a leveraged company facing large debt payments and/or putting its credit ratings at risk, which would lead to higher interest charges.
Hershey has a $250M debt payment due this year (in September), which we expect they will refinance into the 2026+ period at a better rate, its current coupon is 5.45%. They have another $250 due in November as well at a much lower interest rate. Given that the company has conservative leverage with Net Debt / EBITDA of 1.7x and a A1 credit rating from Moody's we don't think refinancing will be any problem.
Interest coverage at over 16x is very high and indicative of no issues meeting its interest payments. Across the board, every leverage/debt metric for Hershey is very strong.
Summary: With the Mondelez/Hershey deal breaking and Hershey stock closing about half the gap to its pre-takeout price, we took a look at the stock again from a yield perspective. Given that little has improved over the past 6 months fundamentally, we think the stock may still have further to fall post-break. Nonetheless, as valuation metrics fall, as they shed their premium take-out multiples, we are increasingly excited about Hershey as a yield play. The company should see rising cash flows, it's conservatively leveraged, and it has a phenomenal dividend history. On top of this, the yield just increased to 2.5% from 2.2% overnight as the stock shed 12%. We will stay on the sidelines as the market digests this news, but will be looking to take a position in Hershey over the coming weeks.

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What's Mondelez's Next Move After Failed Fling With Hershey?

Aug 30, 2016 | The Street

By Bob O'Brien

Mondelez (MDLZ) said Monday what's as obvious as the nose on your face: its unrequited bid for Hershey (HSY) is over. Eighty-sixed. Dead as doornails.
That's going to spur a lot of talk along the lines of: what is Mondelez going to do with the $23 billion it isn't going to spend on the chocolate maker?
First bet is going to be go after General Mills (GIS) . It was popular speculation even before Mondelez made the withdrawal of its bid for Hershey.
So, for the record, branded products companies are gasping for anything approaching organic growth. We, as a society, have officially reached the saturation point in our appetite for the stuff that's in our cupboards, whether it's dried pasta, aerosol cheese or condensed milk.
For growth, branded products companies have to acquire it. Roll up what's either a complimentary operator or, even better, a competitor, and the CEO gets to tell investors, "See, I've achieved what nobody else in our industry is able to do: I've swollen the top line. Appreciably." Granted that growth will likely be with products that have the same paltry margins its existing stable of portfolio brands evidence--but growth is growth, and growth is hard to come by.
Ergo, Mondelez sees Hershey and wants it like a fat kid who presses his face up against the glass of the concession stand at the movie theater.
But Hershey, which has been courted by wanna-be takeover professionals for years, has always had a trump card to play as a takeover defense: the Hershey Trust, which has enough of a stake that it's got to be convinced. And, so far, nobody has measured up. Mondelez isn't the greatest suitor, it's just the latest suitor.
So what's next? General Mills has been mentioned. But General Mills doesn't have a portfolio that syncs up with Mondelez. Mondelez makes stuff consumers eat with their hands. General Mills makes stuff you eat off a plate or out of a bowl.
Now, given the merger mania in the branded products space, there's a chance that General Mills gets chased into the arms of another player just to fend off the likes of a Mondelez. PepsiCo (PEP) has been mentioned. But Pepsi has an equally non-polar product portfolio.
Kraft Heinz (KHC) makes more sense. And Kraft Heinz has the backing of the eternally patient Warren Buffett, as well as the Mexican takeover enterprise 3G Capital, which has to be drawn to the cost cutting initiatives that General Mills has already put in place.
The decision by Mondelez to walk away from its Hershey bid--obvious as it might have seem two months ago--is nevertheless likely to shake the branded products space the way pounding the table upends the Monopoly board, under similar circumstances. And it's hard to exactingly predict the ultimate circumstances.
Let's just say that the next several months will be pretty interesting for bankers working the sector. And could provide some compelling opportunities for traders, given that the ceaseless speculation is going to keep the valuations - already a little overwrought, was General Mills commanding something on the order of 26 times - pretty ripe.

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Investors Should Consider Hershey After Mondelez Pulls Out

Aug 30, 2016 | Seeking Alpha

By Daniel Jones

At the start of July, I published an article on Seeking Alpha regarding The Hershey Company (NYSE:HSY) and the bid that Mondelez International(NASDAQ:MDLZ) placed for the entity. In my piece, I showed why Hershey made for a good prospect for Mondelez and I also stated that market participants expected a meaningfully higher price for the enterprise, but I did warn investors that anti-trust concerns, as well as issues regarding the Hershey Trust Company and Milton Hershey School, would make a transaction between the two uncertain. Now, after Mondelez announced plans to back out of the deal, shares of Hershey are falling around 11% but should investors get in or play it safe and avoid the volatility?
A review of the deal
In a nutshell, Mondelez announced toward the end of June that it was willing to acquire Hershey in a transaction valuing the firm at $107 per share in cash and stock, which came out to about $22.8 billion. Including debt, the deal would have stood at at least $24.9 billion. This sent shares of the company roaring to as high as $117.79 apiece and brought with it a great deal of interest that the two would combine.
In my article on the topic, I stated that the deal, which valued Hershey at 18.9 times operating cash flow, 26.6 times free cash flow and 31.4 times adjusted earnings, was certainly pricey but the rationale behind a transaction was sound (and still is). Though Mondelez would have to pay a pretty penny for Hershey, it would be effectively buying a company that, in its CMG (candy, mint, and gum) operations had a 31.3% market share in the U.S.
This is actually very wise for Mondelez due to the fact that only $1.4 billion of its revenue came from its chocolate, gum, and candy operations in all of North America (it does not look at just the U.S.). Including biscuits into the mix, however, this number soared to about $7 billion. Either way, acquiring Hershey would have given Mondelez a very strong, market-leader foothold in the U.S. and, with it, would have been accompanied by some pretty hefty margins.
You see, according to Hershey's 2015 annual report, the company had an operating cash flow margin of 16.4% last year. Meanwhile, its free cash flow margin was an impressive 11.6% while its adjusted net profit margin stood at 9.8%, which is decent. When you consider that sales in 2015 came out to $7.39 billion, up about 3.4% over the course of two years despite some trouble in certain key markets, this implies operating cash flow of around $1.21 billion, free cash flow of $885 million, and adjusted earnings of $724 million. With a strong market foothold and strong financials, the deal was reasonable.
What's happening now?
Unfortunately for investors in both companies, a deal won't happen (or at least not for the foreseeable future). At the onset of the news being circulated, Hershey announced that it had no reason, after reviewing the proposal, to engage in further discussions with Mondelez but it appears now that discussions did take place. In the end, for whatever reasons (likely price combined with concerns over the company's fiduciary responsibility to the Milton Hershey School), Mondelez released the following statement below, in which Mondelez admitted it sees no "actionable path" forward.
Instead, if you look at some of Mondelez's more recent press releases, it looks as though the business is expanding in other ways. As opposed to expanding into the U.S. by acquiring a big player, they are going to be launching their Milka brand in China during September of this year in an attempt to grab hold of a chunk of the country's $2.8 billion chocolate market. This follows a 2012 decision to enter into China's gum market with two of the company's brands. Today, those brands generate revenue for the business of around $200 million per year.
The other strategy being employed by Mondelez is to consolidate its ownership over other brands, including Cadbury. In a recent press release, management stated that it acquired (for an unspecified price) the Cadbury Biscuits license from Burton's Biscuit Company and, as part of the deal, entered into a manufacturing agreement whereby Burton's will continue to produce these products with its own employees moving forward.
What should investors do?
I cannot and will not get into the business of telling people what they should do, but for investors who love the Hershey brand and who are investing for a very long time horizon, now may be one of the best times to consider acquiring a stake or even increasing an existing one. This is because, although shares of the business are very pricey, the business's margins, market share, and long-term growth potential will very likely provide attractive returns in the long run. After factoring back in dividends from the middle of 1985 (the furthest back I can find data on it for) through today (after factoring in the after-hours drop in share price), shares have risen at an annualized rate of 13.5%.
Takeaway
Based on the data provided, for investors who love a high quality business with strong margins, long-term growth, and who intend to hold on for a long time in order to get the return they desire, now may be the time to consider buying in. Of course, shares may continue to fall but absent something really bad like terrible mismanagement or fraud, Hershey appears to offer relatively safe and attractive prospects without being bought out and always has the potential to soar again should Mondelez come back or another company offer to buy up the enterprise.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Coverage: Mondelez walks away from Hershey

Aug 30, 2016 | Talking Biz News

By Chris Roush

Mondelez International Inc. ended its bid to acquire Hershey Co.after the famed chocolate-bar maker rebuffed a new takeover offer and indicated it would be difficult to strike a deal before next year.
Jess Stynes and Dana Cimulluca of The Wall Street Journal had the news:
Mondelez said in a statement after the market closed Monday that it determined there was “no actionable path forward” in its bid to buy its smaller rival.
The Wall Street Journal reported in June that Mondelez made a roughly $23 billion bid for Hershey, a tie-up that would create the world’s largest candy maker. Hershey rejected the offer, which amounted to $107 a share, half in cash and half in stock.
Mondelez Chief Executive Irene Rosenfeld privately indicated to Hershey officials a willingness to raise the bid to $115 a share last week, according to a person familiar with the matter. Hershey responded that the starting point for discussions would need to be $125 a share. Hershey also indicated that the trust that controls the company, which has been in turmoil, would need to complete a reconstitution before there could be a deal—something unlikely to happen until next year, this person added.
Both Hershey and Mondelez, which is based in Deerfield, Ill., have been under pressure amid a trend toward more-healthy eating and other factors.
John Kell of Fortune notes that Hershey’s stock fell by more than 10 percent on the news:
The news sent Hershey’s shares down a little over 10% in after-hours trading on Monday as investors digested the news, while the Mondelez stock barely budged.
Mondelez Chairman and CEO Irene Rosenfeld said that the proposal had reflected the company’s “conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands.” But she said it became apparent that a deal wouldn’t get done.
“While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions,” Rosenfeld said in a statement.
The future for Mondelez enters uncertain territory. Investors and Wall Street analysts have called for more consolidation among Big Food makers, which have faced tough growth prospects as many legacy brands have reported stalled sales growth in mature markets as consumer spending patterns change.
Greg Roumeliotis of Reuters reported that Mondelez’s CEO had made a new overture last week:
Mondelez’s Chief Executive Officer Irene Rosenfeld approached Hershey Chief Executive John Bilbrey again last week, and indicated that Mondelez would be willing to offer up to $115 per share for Hershey, according to a source familiar with the discussions who asked not to be identified because they were confidential.
Hershey responded that the trust would not be able to consider an offer until it is reconstituted next year, the source said. Even then, Hershey would not be willing to enter into deal negotiations for an offer of less than $125 per share, the source added.
Hershey did not respond to a request for comment. Its shares fell 11.4 percent in after hours trading in New York on Monday to $99.00.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement,” Rosenfeld said in a statement.
The Hershey trust holds 81 percent of the company’s voting stock, and so a sale is not possible without its approval. About two-thirds of its $12 billion in assets are in Hershey stock.

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Mondelez International Inc Backs Away From Hershey Co (HSY) Takeover Bid

Aug 30, 2016 | BidnessEtc

Mondelez yesterday gave up on its plans to take over Hershey Co.’s (NYSE:HSY), after pursing the chocolate maker for more than a month. Following the announcement, Hershey shares plunged more 11% in after-hours trading. Mondelez’s shares, on the other hand, rose 3% as investors seemed happy with the development.
In an official statement, the Oreo cookie maker’s CEO Irene Rosenfeld stated that following the discussions, the company has decided that “there is no actionable path forward toward an agreement". She also said that though the management is disappointed with the outcome, it will remain committed to add value to the company either by acquisitions or by building investor confidence regarding long-term performance.
Mondelez scrapped its bid to buy Hershey as last week the chocolatier rejected Mondelez’s second acquisition offer and hinted that the company cannot strike a deal until next year because of “changing dynamics at its controlling shareholder, Hershey Trust Co., The Wall Street Journal (WSJ) reported, citing sources familiar with the matter. Ms. Rosenfeld also indicated in an official statement that Mondelez has scrapped the deal after “taking into account recent shareholder developments at Hershey.”
Hershey Trust Co. is in the midst of reconstitution of its board of directors after they were alleged for profligacy, disregard for term limits, and self-dealing. The $12 billion trust controls 81% of voting shares in Hershey, which added uncertainty to the situation. According to WSJ, the chocolate maker also indicated that there can be no deal without reconstitution.
The Oreo cookie maker initially offered $23 billion for the purchase. It offered $107 per share, half in cash and half in stock, but the chocolate maker refused the bid in June. According to WSJ, Ms. Rosenfeld last week privately indicated to CEO of Hershey, J.P. Bilbrey that Mondelez was willing to increase the offer to $115 per share. However, the chocolate maker said that a bid of at least $125 per share was required to start any discussions.
The takeover would have combined Hershey’s Reese’s, Kisses, and namesake chocolates with Mondelez’s Oreo, Cadbury brands, and Nabisco, creating a global snacking giant with $37 billion in annual sales. The acquisition would have created synergies and helped Hershey expand its reach overseas, while boosting Mondelez sales in the US.
Rosenfeld also said that the proposal to buy chocolate maker showed the company’s “conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands.” However, the Oreo cookie maker CEO is still focused on execution of strategy to improve margins and deliver “sustainable top-line growth” as the world’s leading snacking company. She also added that the company is well-positioned in the industry and will continue to add value for its shareholders.
However, the failure to strike a deal with Hershey spells uncertainty for Mondelez’s future growth. Analysts and investors have been suggesting acquisitions and mergers among food makers as they have been facing headwinds and reporting stalled growth in mature markets, owing to the change in consumer spending patterns.
The possibility of Mondelez itself becoming a takeover target has also been prevailing in the market even before the company started its pursuit for Hershey, which is viewed as Ms. Rosenfeld’s strategy to scale up business and counter any takeover attempt. The company will likely continue to hunt for acquisitions as implied by the CEO’s statement. Mondelez, however, did not mention any potential upcoming proposals for acquisition.

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Mondelez ends merger discussions with Hershey, leaving Mars' dominance in tact

Aug 30, 2016 | The Drum

By Tom Connelly

Discussions of a possible merger between Oreo ownerMondelez and The Hershey Company have ended after the two companies failed to come to an agreement.
Mondelez’s chief executive, Irene Rosenfeld, said the company decided “there is no actionable path forward toward an agreement” following the latest discussions between the two companies.
Had the deal gone through the new entity would have represented a global powerhouse with some of the world’s best-known chocolates and snacks in its products range including Cadbury and Oreo.
In June, Hershey revealed that its controlling shareholder, the Hershey Trust, had rejected a preliminary takeover bid from Mondelez International valued at roughly $22.3bn.
The same month Mondelez informed Hershey that it would take its name and move its global headquarters to Pennsylvania.
Euromonitor International said the acquisition would have resulted in the new company overtake Mars Inc to become the top player in the chocolate industry. Hershey shares have subsequently slide 11 per cent in after-hours trading while Mondelez shares added 3.4 per cent in extended trading.

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Mondelez drops out of $23bn bid to acquire Hershey

Aug 30, 2016 | Food Business Review

American confectionery, food, and beverage company Mondelēz International has dropped out its $23bn bid to buy Hershey after its offer was rejected by chocolate maker.
The maker of Oreo cookies and Cadbury chocolates has announced that it has ended its discussion with Hershey Company regarding the possible combination.
Mondelez International had made the cash and stock offer to acquire Hershey in June which was rejected and it made another offer which was rejected last week.
The combination could have created a largest candy company commanding about 21% of global sweets sales.
Mondelez International chairman and CEO Irene Rosenfeld said: "Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement.
Mondelez initially offered $107 per share in June which was rejected. According to media reports, the company later agreed to increase the offer to $115 per share.
The reports also added that Hershey was asking for $115 per share before going ahead with the talks.
Irene Rosenfeld added: “While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions, and confident that our advantaged platform positions us well for top-tier performance over the long term."
"As the world's leading snacking company, we remain focused on successfully executing our strategy to deliver both sustainable top-line growth and significant margin expansion and are well-positioned to continue to deliver value to our shareholders."
Hershey, majority-controlled by the Hershey Trust, owns more than 80 brands with an annual revenue of more than $7.4bn.
Some of the notable brands include Hershey's, Reese's, Hershey's Kisses, Jolly Rancher, Ice Breakers and Brookside.

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Mondelez backs off from Hershey pursuit

Aug 30, 2016 | ShareCast

The owner of Cadbury chocolate has lost its interest in buying US confectionery company Hershey, after having two bids rebuffed in recent months.
Mondelez International, one of the world's largest snack-makers, had put forward offers of $107 and $115 a share for Hershey, but the company's notoriously stringent board were uninterested, valuing the business at around $125 per share, according to the Financial Times.
Monday's news had a late impact on US trading, as Hershey fell 11.2% in New York, after rising 16% since reports of the first offer from Mondelez.

Hershey Trust, a charity which has previously fended off sales of the company, holds 80% of the voting rights in Hershey.

The matter was further complicated after a revamp of the Hershey Trust was announced in response to heavy scrutiny regarding its spending practices. Mondelez are reported to have been wary of such an overhaul, and contributed to their pulling out of the deal.

"We remain disciplined in our approach to creating value, including through acquisitions, and confident that it positions us well for top-tier performance over the long term," said Rosenfeld.The company's chief executive Irene Rosenfeld said in a statement that they were "disappointed" with how the negotiations had concluded, and added that there was "no actionable path forward toward an agreement".

The deal would have combined two industry leaders to create the largest confectionery company in the world.

Hershey takes in around 90% of its revenue from the United States, while sales in China have been dropping while it tries to acquire a local brand to boost its profile.

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Mondelez kisses its Hershey bid good-bye

Aug 30, 2016 | Ocular USA

Oreo cookie maker Mondelez International (MDLZ) says it has ended discussions of a possible merger with Hershey (HSY), a combination that would have created a global powerhouse selling some of the world’s best known chocolates and snacks.
Hershey had said in June that it rejected a preliminary takeover bid from Mondelez valued at roughly $22.3 billion, according to FactSet. Hershey didn’t immediately respond to a request for comment Monday. A deal would have needed the approval of the Hershey Trust, a controlling shareholder.
Hershey shares slid 11 percent in after-hours trading, to $99. Mondelez shares added 3.9 percent, to $44.70, in extended trading.
In a statement, Mondelez CEO Irene Rosenfeld said the company decided “there is no actionable path forward toward an agreement” following additional discussions.
Mondelez, based in Deerfield, Illinois, makes Nabisco cookies, Cadbury chocolate and Trident gum. The company was created after a split from Kraft Foods, which has since gone on to combine with Heinz to create the Kraft Heinz (HNZ).
Back in June, The Wall Street Journal had reported that Mondelez told Hershey it would take the chocolate maker’s name and move its global headquarters to Hershey, Pennsylvania, as part of the deal. The acquisition would have made the combined company the candy industry’s largest player, according to Euromonitor International, passing the current No. 1, Mars Inc.
The deal was seen as complementary in part because Mondelez gets most of its revenue from overseas, while Hershey gets most of its revenue from North America.
The offer to buy Hershey came as the charitable trust that controls the company has been in turmoil. In July, the trust said a board member was resigning.
Later, Pennsylvania’s attorney general said it reached an agreement with the trust that involved five board members leaving, and limiting compensation. The agreement came from an investigation into the trust’s compliance with a 2013 agreement.

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Oreo cookie maker Mondelez abandons bid for Hershey

Aug 30, 2016 | Financial Spots

By Betsy Taylor

Mondelez International Inc, the maker of Oreo cookies and Cadbury chocolates, said on Monday it was "no longer pursuing" a merger with Hershey Co.
The maker of Oreo cookies and Cadbury chocolate plans to provide more details at an upcoming industry conference on September 7.
Rosenfeld had been chairman and CEO of Mondelez predecessor Kraft since 2007, and kept those titles at Mondelez, the global side of the business, after Kraft split itself in two.
The announcement came almost two months after Hershey, the maker of Reese's Peanut Butter Cups and Hershey's Kisses, rejected a $23 billion takeover offer from Mondelez.
Any takeover of Hershey, known for its namesake Kisses and chocolate bars, faced multiple obstacles.
Mondelez Chief Executive Irene Rosenfeld privately indicated to Hershey officials a willingness to raise the bid to $115 a share last week, according to a person familiar with the matter. A deal would have been subject to the Hershey Trust, a controlling shareholder.
Back in June, The Wall Street Journal had reported that Mondelez told Hershey it would take the chocolate maker's name and move its global headquarters to Hershey, Penn., as part of the deal.
The deal was seen as complementary in part because Mondelez gets most of its revenue from overseas, while Hershey gets most of its revenue from North America.
The reform agreement for Hershey Trust came after an investigation of several months by the Pennsylvania Attorney General's office over the charitable trust's governance, compensation and expenses.

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Mondelez abandons Hershey takeover plans after talks fail

Aug 30, 2016 | International Business Times

By Karthick Arvinth

Hershey's share price has plunged after rival Mondelez International announced it was no longer pursuing a merger with the US chocolate giant.
In a statement released on 29 August, Mondelez said there was "no actionable path forward" towards reaching a merger agreement with Hershey, two months after it had a $23bn (£17.6bn) cash-and-stock offer rejected.
A successful merger between the two companies would have created the world's largest confectioner.
Shares in Hershey were down nearly 12% at $98.60 in after-hours trading in New York following the news.
"Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands," Mondelez chief executive Irene Rosenfeld said.
"Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement."Improved offer
Illinois-based Mondelez, the maker of Oreo cookies and Cadbury chocolates, was seeking to boost its presence in the US market with the acquisition of Hershey.
A source told the Reuters agency that Rosenfeld approached Hershey chief executive John Bilbrey last week and offered $115 per share for the company.
However, Bilbrey responded that the Hershey's controlling shareholder — the Hershey Trust — would not be able to consider the offer until next year as it was being reconstituted.
The source added that Hershey was holding out for an offer of $125 per share.
As part of its takeover bid, Mondelez had pledged to protect jobs at Hershey and also to take its name and locate its global chocolate headquarters at Hershey, Pennsylvania.
Buying Hershey would have given Mondelez control over the production and distribution of Cadbury chocolates in the US, which currently Hershey holds the licence to produce, paying royalties to Mondelez.
It would also have provided Mondelez with the right to make and distribute Kit Kat chocolates in the country, potentially providing a significant boost to its business.

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Mondelez Drops Hershey Bid

Aug 30, 2016 | Investor's Business Daily

By Elaine Low

The Oreos maker said after the market close that it is no longer looking to acquire chocolatier Hershey, sending shares of Mondelez up 3.4% in late trade and sinking the Kisses maker in the double digits.
"Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement," said Mondelez in a news release, adding that it was "disappointed in this outcome."
Hershey shares tanked 11% after hours in the stock market today. In late June, its board of directors had unanimously smacked down Mondelez's $107-per-share cash-and-stock takeover offer.

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Cadbury's Owner Abandons Hershey Takeover

Aug 30, 2016 | Sky News

The owner of Cadbury's and Oreo has abandoned an £18bn ($23bn) offer for Hershey.
The deal would have created a global giant selling some of the world's best-known chocolates and snacks.
Hershey had rejected a preliminary offer from Mondelez in June.
Mondelez boss Irene Rosenfeld said a deal "combining two iconic American companies" would have created an "industry leader with global scale".
But she said that following further talks there was "no actionable path forward toward an agreement" and expressed disappointment.
Shares in Hershey fell 11% in after-hours trading on Wall Street.
Mondelez - created in 2012 when it was spun off from Kraft - is the second largest confectionery company in the world, with Hershey at number five.
Kraft's £11.5bn takeover of Cadbury's in 2010 attracted controversy.
The company reneged on a pledge to keep open a plant near Bristol - resulting in 450 job losses.
Last year, Mondelez came under fire after it was revealed that it had paid no UK corporation tax in 2014.
It said it complied with all UK tax law.
Hershey's sales growth has slowed in the last two years amid expansion from rival Mars, and premium chocolate brands such as Lindt entering the US market.

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Why Mondelez gave up on acquiring Hershey

Aug 30, 2016 | Crain's Chicago Business

By Peter Frost

The deal just wasn't sweet enough—for either side. Mondelez International has ended its two-month flirtation with chocolate-maker Hershey, after the two companies were unable to agree to a purchase price.
The Deerfield-based snacks company first approached Hershey in June with a takeover bid of about $23.2 billion, a 10 percent premium to Hershey's stock price the day the news was announced. The Hershey board unanimously dismissed the half-cash, half-stock bid, which amounted to $107 per share. After negotiations, Mondelez raised its offer to $115 a share, according to the Wall Street Journal, which cited a source familiar with the deal. Thenewspaper reported that Hershey demanded negotiations start at $125 a share, a price too rich for Mondelez.
Neither Mondelez nor Hershey, maker of its eponymous Kisses and chocolate bars, would comment on the reasons the talks fell apart.
After the stock market closed yesterday, Mondelez CEO Irene Rosenfeld said in a statementthat her Deerfield-based company determined "there is no actionable path forward toward an agreement" and said she's "disappointed in this outcome." Mondelez, she said, remains "disciplined in our approach to creating value, including through acquisitions, and confident that our advantaged platform positions us well for top-tier performance over the long term."
The announcement surprised investors who expected Rosenfeld to continue her pursuit of the chocolate maker, which controls more than 45 percent of the U.S. chocolate market. Shares of Hershey plummeted as much as 13 percent in after-hours trading, to less than $100 a share, near levels it traded at before Mondelez's approach was made public. Mondelez stock, meanwhile, jumped more than 3 percent in after-hours trading, to around $44.50.
“We were surprised—it all ended a little bit sooner and cleaner than expected,” said Brittany Weissman, an analyst for Edward Jones. “We thought there may have been another offer considering changes with the Hershey (Trust) board.”
The charitable Hershey Trust, a $12 billion organization that oversees funds for a nonprofit Pennsylvania school, holds 8.2 percent of the company's common stock but has a majority of its voting power, giving it the ability to block any unwanted buyer. The 10-person board of the trust, which counts on Hershey's dividends to fund its operations, lost three members over the past year and three more, including its chair, plan to retire by the end of next year. The board in late July also agreed to a settlement with Pennsylvania's attorney general, whose office had been investigating the board on allegations of excessive pay and other issues.
“The trust was always a wild card,” Weissman said. “While we never put the chances of the deal going through as very likely, it's nice that this saga won't continue for the next six to nine months, which was a real possibility and also created uncertainty for both companies.”
She said investors were pleased Rosenfeld held the line on the purchase price, noting that any amount higher than $128 or $130 per share would not make financial sense.
As Rosenfeld acknowledged, the purchase would have been a strategic fit for Mondelez, which makes Oreo cookies, Nabisco crackers and Trident gum. Because most of its chocolate brands, including Cadbury and Milka, are sold exclusively outside the U.S., Hershey would have filled an unmet need by offering up a significant portion of the domestic market.
The combination of the world's No. 2 and No. 5 confectioners would have surpassed Mars as the world's biggest candy titan, making it big enough to effectively shield itself from being acquired.
But now it appears Mondelez will go back on the hunt for acquisitions or risk reverting to the subject of takeover speculation that permeated the market prior to its courtship of Hershey.

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International Coverage

Cadbury's owner Mondelez scraps takeover bid

Aug 30, 2016 | BBC News

Snacks giant Mondelez International is abandoning its takeover bid for American confectioner Hershey after its $23bn (£18bn) offer was rejected.
The deal would have created the world's biggest maker of confectionery, but Hershey turned down the cash and stock offer in June.
Hershey shares tumbled by as much as 12% in late US trading on the news. Mondelez shares rose by almost 4%.
Mondelez brands include Cadbury chocolate and Trident chewing gum.
Its chief executive Irene Rosenfeld said the board was "disappointed with the outcome" but had decided there was "no actionable path forward toward an agreement".
"Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands," shesaid in a statement.Trust issues
Hershey raked in nearly 90% of its revenue from North America last year, mostly from chocolate sales.
The Pennsylvania-based company had reportedly looked for at least $125 per share before agreeing to any takeover talks. Mondelez had initially offered $107 per share.
Complicating matters further is Hershey's company structure.
The maker of Reese's peanut butter cups is majority-controlled by the Hershey Trust, a charity which has prevented previous sales of the company.
The Hershey Trust is revamping its board and management rules after coming under scrutiny for its spending practices.
The changes at Hershey don't come into effect until next year and its shareholders are said to have been averse to any transactions before then.Share this story About sharing

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Cadbury owner Mondelez abandons $23bn pursuit of Hershey

Aug 30, 2016 | The Telegraph

By Ashley Armstrong

Cadbury owner Mondelez has scrapped its pursuit of rival Hershey to create the world’s biggest chocolate company after failing to sweeten its $23bn (£17bn) offer enough to tempt its target to do a deal.
The failure has highlighted the power Hershey’s charitable trust wields in rebuffing unwanted interest. The trust, which controls 81pc of the company's voting rights, was set up by Hershey's founder more than a century ago to fund a school for underprivileged children.
Mondelez’s initial $107 per share offer was rejected in June before chief executive Irene Rosenfeld approached her opposite at Hershey, John Bilbrey, last week. She is said to have shown a willingness to raise the offer to $115 a share.
However, reports suggest that Hershey was not willing to consider a bid of less than $125 a share and was unwilling to talk while its charitable trust’s rules were being renegotiated.
Since reports of Mondelez's bid interest surfaced two months ago, Hershey shares have been trading 20pc higher at around 111p, however they are expected to fall heavily when New York markets react to the deal's collapse.
Ms Rosenfeld said that the Mondelez board was “disappointed with the outcome”, but decided there was "no actionable path toward an agreement”.
"Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands," she said in a statement.
Ms Rosenfeld shot to prominence in the UK after spearheading Kraft’s hardball negotiations with Cadbury. She gained notoriety for refusing to attend a Westminster inquiry into Kraft's failure to keep its promise that it would keep the Bournville factory.
The £11.5bn, which was widely criticised as an example of British weakness in defending homegrown companies from unwanted advances, led to a rewriting of UK takeover rules.
During the takeover saga, Hershey and the Italian maker of Nutella, Ferrro, plotted to trump Kraft with a joint bid for Cadbury, but the complicated ownership structures at the two companies put a deal out of reach.
Hershey, which makes 90pc of its revenues in North America, has owned the rights to produce an American version of Cadbury’s chocolate since the late 1980s, and last year launched a legal battle to block the import of British Cadbury chocolate, which is less sweet.
The move triggered a huge outcry from British expats in the US and prompted a Vanity Fair article to suggest that chocoholics could stage a Boston Tea Party in reverse, hurling Hershey products into New York’s Hudson River.

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Mondelez Backs off from Hershey Pursuit

Aug 30, 2016 | LiveCharts.co.uk

The owner of Cadbury chocolate has lost its interest in buying US confectionery company Hershey, after having two bids rebuffed in recent months.

Mondelez International, one of the world's largest snack-makers, had put forward offers of $107 and $115 a share for Hershey, but the company's notoriously stringent board were uninterested, valuing the business at around $125 per share, according to the Financial Times.

Monday's news had a late impact on US trading, as Hershey fell 11.2% in New York, after rising 16% since reports of the first offer from Mondelez.

Hershey Trust, a charity which has previously fended off sales of the company, holds 80% of the voting rights in Hershey.

The matter was further complicated after a revamp of the Hershey Trust was announced in response to heavy scrutiny regarding its spending practices. Mondelez are reported to have been wary of such an overhaul, and contributed to their pulling out of the deal.

"We remain disciplined in our approach to creating value, including through acquisitions, and confident that it positions us well for top-tier performance over the long term," said Rosenfeld.The company's chief executive Irene Rosenfeld said in a statement that they were "disappointed" with how the negotiations had concluded, and added that there was "no actionable path forward toward an agreement".

The deal would have combined two industry leaders to create the largest confectionery company in the world.

Hershey takes in around 90% of its revenue from the United States, while sales in China have been dropping while it tries to acquire a local brand to boost its profile.

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Cadbury's owner Mondelez passes on Hershey takeover as deal sours

Aug 30, 2016 | Evening Standard

By Lucy Tobin

After a takeover chase lasting more than two months, Mondelez would not raise its offer to the starting bid of $125 a share that insiders said Hershey was demanding.
It had initially offered $107 per share and is thought to have gone up to $115 per share.
Mondelez — which bought Cadbury’s in 2010 when it was known as Kraft Foods — had struggled to buy Hershey because of its corporate structure. It is majority-controlled by the Hershey Trust charity, which has prevented previous sales of the company, and which is in the process of revamping its board after coming under scrutiny for big-spending.
After Mondelez called off the takeover earlier, Hershey shares tumbled 11% and Mondelez stock climbed 3.3%.
“Combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery,” said Irene Rosenfeld, Mondelez chairman and chief executive.

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Mondelez drops takeover bid for US chocolate maker Hershey

Aug 30, 2016 | Progressive Grocer India

Confectionery major Mondelez has abandoned talks to buy candymaker Hershey, two months after the US chocolate company turned down its $23 billion cash-and-stock bid.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement,” Mondelez said in a statement.
Mondelez’s offer in June consisted of US$107 in cash and stock for every Hershey share — a 10 per cent premium at the time.
Rosenfeld had also approached Hershey Chief Executive John Bilbrey again last week, and indicated that Mondelez would be willing to offer up to US$115 per share for Hershey.
Hershey responded that the trust would not be able to consider an offer until it is reconstituted next year.
The Hershey Trust, which controls about 81 per cent of Hershey’s shareholder votes, is in the midst of overhauling its own board of directors following an investigation by state regulators, and investors had wondered if Mondelez would be able to win its approval by striking during a period of uncertainty.
The proposed tie-up would have created a major global snacking giant with US$37 billion in annual sales and could have combined Mondelez’s Nabisco, Oreo and Cadbury brands with Hershey’s namesake chocolates, Reese’s, and Kisses candies.
“Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands,” said Chairman and CEO, Mondelez, Irene Rosenfeld in a statement.
“While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions,” Rosenfeld said

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Broadcast Coverage

Squawk on the Street

Aug 30, 2016 | CNBC

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Rough transcript: there's no deal between mondelez and hershey in a statement late yesterday, mondelez says, following additional discussions -- and by the way, those discussions were between the ceo of mondelez and irene rosenfeld. after the release, i'm takinginto account recent shareholder developments, we determined there is no actionable path forward towards an agreement. you can see hershey shares are going to be down over 10% and mondelez is going to be up about 3%. jim this was always a tough one from the start. >> because of the trust, the presence of the hershey trust which controls hershey, 80% of the vote, 34% of the economics. but as i reported in that first day, there had been months of back and forth between rosenfeld. i always had the question as to well, when it was rejected, so forcefully that 107 bid that was made initially by modelez they never get around in discussing the perceptions they had, versus what mondelez was having to pay? you can tell you people familiar with the situation that rosenfeld said we may go to 115, but she was told 125 has to be the starting point for negotiations. >> there's no level of earnings power that can justify this to 28, 29. i cannot justify that. >> not to mention the earnings from the kitkat license revert to nestly, that's 10%. that's something that mondelez has been making light of. i'm hearing the trust has added a lot more members, was impossible to negotiate with. people saying to me, there was simply no ability to figure out the problems at hand. you have the company on the one side, but then you have the trust and what was simply an inability to make decisions about the economic level they see at hershey, sell their stake at some number. >> hershey is well run, but i guess the trust account get in the way of the management. the amendment is pretty good at hershey. they've done a good job. i guess the disfunction is at that trust level. it doesn't affect the actual team that run hershey, which used to be not good at all because people felt they couldn't get taken over, so they did what they wanted. it was a pennsylvania constitutional institution, and they moved operations overseas, and became a lot more economic. it's a well-run company, which is why i couldn't see the higher bid. it's not a bad company they can do more. >> no, although there had been on the hope on the part of mondelez, you create this global confection company, they had cadbury already. it's interesting from the trust perspective, and by the way, if you haven't kept up with it, a number of members have left, because of the attorney general -- >> she's out. >> -- she's out because she got convicted. but that trust will recompose itself late this year, early next year, but at some point, one would think given almost all of the assets they owner in hershey stock, maybe they want to diversify from a domestic chocolate maker. you could make an argument they could benefit and be acting responsibly as trustees, diversifying and that doesn't seem to be something that is in the offering.

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CNN Money with Maggie Lake

Aug 30, 2016 | CNN

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Rough transcript: in terms of that hershey deal it's interesting that everything went silent hershey and hershey fell. and that really stunned investors i think that they had hopes that this deal would go through. there there was a hope that it would go through but he also signs point to the fact that it was just utter frustration and you can tell from mondelez saying that there is just no path forward for a deal on this news were seeing shares of mondelez up three percent as you said shares of hershey's are down about eleven percent but it's interesting even with all these talks going on in and the old timid ending of any kind of relationship between the two in a boost overall that shares of hershey got during the timing ofthese talks we saw the shares spike sixteen percent i've that first offer where hesitation where mondelez had offered a hundred seven dollars per share to take over our hershey's the offer representing a ten percent premium on this shares by the closing shares of our hershey at the time but then you see you know overall year to date hershey shares up twenty five percent today clearly i hershey shares taking a hit.

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Varney & Company

Aug 30, 2016 | FBN

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Rough transcript: we know this company, hershey down roughly 10%. mondelez, which owns oil and many, many brands. they offered to buy hershey and down goes hershey's stock.

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Morning Express with Robin Meade

Aug 30, 2016 | CNNH

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Rough transcript: herhey's chocolate will stay.there was some thought and fear that they were going to get some new corporate overlords because rival cadbury had offered billions to take over hershey. cadbury is walking away though. hershey was structured a long time ago in a way that would make it very hard to have a hostile takeover.

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Mornings with Maria Bartiromo

Aug 30, 2016 | FBN

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Rough transcript: but there are a number of stocks on the move this morning. hey, hershey, for example, the stock down 10% after mondelez says it's dropping its move for the bid. hershey turned down a $107 a share offer from mondelez, would have created the largest candy maker. mondelez stock is up on the session as you can see, but hershey is plummeting.

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Morning Express with Robin Meade

Aug 30, 2016 | Talk News

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Rough transcript: hershey's chocolate is staying hershey's chocolate. cadbury was in an offer to buy it out, but it will not happen. when hershey got the contract together, they made sure it would be difficult for a buyout. although hershey's stock will loss some, but the dow jones industrial average rallied to 18,502. >

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Morning Joe

Aug 30, 2016 |

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Rough transcript: you guys mentioned hershey. we'll watch that. it is tumbling on word last night that it is a rival snack maker, the maker of oreos will not be pursuing hersheys far deal. it has been chasing after hershey to create the world's largest snack maker, combing oreos and hershey. you can imagine the possibilities, or not. because that deal is tanking.

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Squawk Box

Aug 30, 2016 | CNBC

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Rough transcript: mondelez is walking away form its proposed takeover bid for hershey. ending talks after their months' long campaign to take over hershey's saying it was disappointed with the outcome. the acquisition would have made the world's largest candy maker. here's how the market is responding. investors in hershey down by 11%. mondelez up by about 3.5%.

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