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Hershey Media Report 9/13/16
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Mondelez Takes Aim At U.S. Candy Market With Oreo Chocolate Bars After Hershey Rebuff
Sep 13, 2016 | Vending Times
By Emily Jed
Mondelez International Inc. is planning to make a splash in the U.S. chocolate market with Oreo chocolate bars. The news follows Hershey's rejection of its $23 billion offer to acquire the chocolate giant -
What goes into an M&A deal: a comprehensive timeline of events
Sep 12, 2016 | YourStory.com
By Bhakti Varma
Brief discussion of the rejected bid in a greater article about mergers and acquisitions. Relevant portion pasted below. -
Mondelez plans sole US chocolate invasion with Milka Oreo and Green & Black's
Sep 12, 2016 | Confectionary News
By Douglas Yu
Brief mentions of the rejected bid in a greater article about Mondelez's plans to grow. Relevant portion pasted below. -
Five Packaged Foods Stocks to Buy Now
Sep 12, 2016 | Insider Monkey
By Shas Dey
Brief mentions of the rejected bid in a greater article about Mondelez's plans to grow. Relevant portion pasted below. -
Hershey: Not So Sweet
Sep 13, 2016 | Seeking Alpha
Mondelez has abandoned its bid to acquire Hershey, which means that the latter’s investors have to revalue its shares based on its standalone outlook. In our view, although Hershey’s revenue outlook is generally better than that for its peer group, it doesn’t justify its current market multiple, which is at a notable premium.
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Mondelez Takes Aim At U.S. Candy Market With Oreo Chocolate Bars After Hershey Rebuff
Sep 13, 2016 | Vending Times
By Emily Jed
Mondelez International Inc. is planning to make a splash in the U.S. chocolate market with Oreo chocolate bars. The news follows Hershey's rejection of its $23 billion offer to acquire the chocolate giant.
Mondelez executives announced the plan at the Barclays 2016 Consumer Staples Conference. The global snack and confection company said its Oreo-branded chocolate bars will be made with the company's Milka chocolate, better known in Europe.
Oreo bars will be sold in the U.S. on a limited basis beginning in the fourth quarter with a full launch planned for early 2017. They are already sold in more than 20 countries globally.
One version will feature bits of Oreo cookie mixed with cream enrobed in chocolate, and the other will have an Oreo wafer in the middle with cream on the top and bottom. Mondelez said it also plans to expand the market for its Green & Black's organic chocolate bars.
"We have a very small presence in the U.S. [chocolate market], so entering this category represents significant white space opportunity for us," said Mondelez chief growth officer Tim Cofer at the Barclays conference.
Mondelez, which sells Cadbury and Milka chocolate abroad, is the second-largest chocolate company globally by sales, but only the eighth largest in the U.S., according to Euromonitor International.
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What goes into an M&A deal: a comprehensive timeline of events
Sep 12, 2016 | YourStory.com
By Bhakti Varma
After all parties are satisfied with their respective reviews, companies move towards attaining necessary approvals. If it is a stock–for–stock deal, a shareholder approval is required for the deal to complete. The $115-per-share offer of Mondelez International – the Oreo cookie and Cadbury maker – was rejected by Hershey Co. The trust that controls Hershey holds 81 percent of the voting stock. Following a row with the Attorney’s General Office, the trust is unable to consider an offer until it is reconstituted. This deal would have created the world’s largest confectioner.
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Mondelez plans sole US chocolate invasion with Milka Oreo and Green & Black's
Sep 12, 2016 | Confectionary News
By Douglas Yu
Mondelez plans to take its Milka Oreo brand to US chocolate market after its failed bid for Hershey and will expand its premium chocolate offerings with Green & Black's.
It will now compete with US chocolate leader Hershey, which owns Cadbury licensing rights from Mondelez, the company announced during the Barclay's Global Consumer Staples Conference in Boston, Massachusetts.
Mondelez's $23bn bid for Hershey was rejected in July and market analysts predicted the Oreo manufacturer would either try to acquire a smaller-scale, yet still important chocolate brand, such as Ferrero, to increase its chocolate business in the US, or eventually rejoin Kraft Heinz.
But the firm hopes to expand its footprint into the US chocolate market, where it has 'only a small presence today,' via its own brands.
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Five Packaged Foods Stocks to Buy Now
Sep 12, 2016 | Insider Monkey
By Shas Dey
Mondelez International, Inc. (NASDAQ:MDLZ), formerly known as Kraft Foods, is one of the largest snack food makers in the world. The $70 billion company has been recently in the news, after Hershey had rejected its $23 billion cash-and-stock takeover bid, which would have created a giant confectionery company out of the two iconic brands. As part of its strategy, Mondelez is expanding its online presence, and hopes to earn $1 billion in revenue from that segment by 2020. Among the funds we track at Insider Monkey, 62 funds held $6.68 billion worth of Mondelez’s stock in aggregate at the end of June, having amassed 9.50% of its outstanding stock, compared to 63 investors that held $5.66 billion worth of shares a quarter earlier.
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Sep 13, 2016 | Seeking Alpha
Mondelez has abandoned its bid to acquire Hershey, which means that the latter’s investors have to revalue its shares based on its standalone outlook.
In our view, although Hershey’s revenue outlook is generally better than that for its peer group, it doesn’t justify its current market multiple, which is at a notable premium.
Hershey’s shares will have to drop a lot more before they'll be sweet enough for Dividend Investors to consider.
Analysis
Mondelez Abandons Plan to acquire Hershey. Mondelez (NASDAQ:MDLZ) recently announced that it no longer intended to acquire the Hershey Company (NYSE:HSY) after the latter rejected its offer to buy it for as much as $115 per share.
Complicating matters was the reconstitution of Hershey's board, which has nine vacancies following a corporate governance agreement between the Hershey Trust (which holds 81% of the company's voting stock) with the Pennsylvania Attorney General that expanded the Trust's board membership to 13 members. Another hurdle was an indication from Hershey that it wouldn't entertain offers of less than $125 per share.
Investors who are interested in Hershey are probably wondering, what now? Since peaking at nearly $114 per share in late August, the stock has fallen by over 14% as a result of the collapse in the Mondelez talks.
For dividend investors, now might seem like a good time to buy the stock. After all, the drop in Hershey's stock price has pushed it towards the middle of its 52-week range and boosted its dividend yield to nearly 2.6%, which is a superior yield to what the S&P500 is currently paying. Thus, an investor who buys Hershey shares today can look forward to around $257 in passive income from holding Hershey shares.
The question is whether investors should be buying Hershey shares. Let's take a look:
Dividend and Outlook. Absent a Mondelez deal, Hershey investors are looking at an entity expecting flat sales growth of 1% in the current fiscal year. Having said that, an acquisition by Mondelez would probably not have changed Hershey's immediate fortunes by much, if at all. Hershey is such a large and diversified entity by itself and its products are so ubiquitous already that any positive gains from becoming part of Mondelez's portfolio would have been below its top line in the form of operational deleveraging. Moreover, anti-trust considerations might have necessitated the sale of some product lines, resulting in a larger net decline in Hershey's top line than it would have as a standalone entity.
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