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Hershey Trust 8/29
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No Radical Chances Expected at Hershey as Trust Cuts Stake: SIG
Aug 28, 2017 | Confectionery News
By Douglas Yu
The Hershey Trust last week sold approximately $159m (1.5m shares for $106 per share) to The Hershey Company. -
Ken Hatt, former Hershey exec who had role in '$50 million phone call' that birthed Hershey Med, has died
Aug 27, 2017 | PennLive
By Charles Thompson
Kenneth Hatt, a one-time Milton Hershey School student who rose from messenger to the top of the Hershey corporate ranks and helped breathe life into the Hershey Medical Center, died Thursday at his home.
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No Radical Chances Expected at Hershey as Trust Cuts Stake: SIG
Aug 28, 2017 | Confectionery News
By Douglas Yu
The Hershey Trust last week sold approximately $159m (1.5m shares for $106 per share) to The Hershey Company.
The Trust sold an additional 3 million shares of common stock in Hershey to Morgan Stanley. It, however, did not disclose the price of these shares.
Hershey Trust's economic interest in the chocolate company goes from 34.3% to 32.3%, but its voting interest changes little (from 81.5% to 81%).
Eric Henry, CEO of the Trust, said: “Hershey Trust Company recommended and its board approved a partial sale of the common shares of the Hershey Company as an appropriate means of providing ongoing and additional financing for Milton Hershey School (charity school for disadvantaged children).”
“The concentration of the Hershey Company stock in our overall portfolio has increased over the years because of the exceptional performance of the Hershey Company and corresponding stock value,” he added.
The latest Q2 financial results showed that Hershey’s net sales reached $1.66bn, increasing 1.5% compared to the same period last year, ConfectioneryNews recently reported.
‘An evolving entity’
Investment company Susquehanna International Group (SIG) wrote in a report the transaction is an indicator the Hershey Trust is an evolving entity, and it has other priorities on its hands, such as expanding the Milton Hershey School it oversees as well as other development projects.
“[The Trust] is unlikely to look at strategic alternatives for its stake in Hershey in the near or medium term,” the financial group said. “Certainly, maximizing the value of the Hershey stake is not at the top of the agenda for the Trust.”
“With lackluster top line trends, candy category challenges (down 5% in the last three months) and on the margin new competition from Mondelēz in the US, we see more downside than upside in the near term for Hershey shares,” SIG said, adding the Trust may consider a sale or merger of Hershey in the longer term.
The Reese’s maker rejected Mondelēz’s $23bn takeover approach last year, a bid that would have created the world’s largest candy company.
Board members change
The Trust had previously been accussed of extravagant spending that led to three board members stepping down in December 2016. The company selected three new members earlier this year, including former partner of Goldman Sachs, James Katzman; Jan Loeffler Bergen; and an alumna of the Milton Hershey School, Melissa Peeples-Fullmore.
A spokesperson for the Trust said it hopes to have 13 members on board by the end of 2017.
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Aug 27, 2017 | PennLive
By Charles Thompson
Kenneth Hatt, a one-time Milton Hershey School student who rose from messenger to the top of the Hershey corporate ranks and helped breathe life into the Hershey Medical Center, died Thursday at his home.
He was 93.
In his retirement, Hatt would become known as a vocal protector of what he considered "the Hershey Way," as newer generations of leaders considered what would have been seismic changes like a potential sale of the candy company.
"I think he had a special place in his heart for the whole Hershey concept, and to be a part of that was very meaningful to him," Hatt's niece, Jill Laudermilch, said in a telephone interview Sunday.
Hatt arrived at Milton Hershey School from Mohnton, in southern Berks County after he was orphaned at an early age.
Hatt graduated from the school in 1941 and, like many at the time, went to work for Hershey Estates, which was the predecessor of the Hershey Entertainment and Resorts Company.
Unlike many of those students, however, Hatt eventually - through a combination of hard work and dedication to the Hershey cause - became president and CEO of HERCO - serving in that capacity from 1980 through retirement in 1986.
During his time in senior management, HERCO oversaw the redevelopment of HersheyPark from a regional attraction into a major East Coast theme park; grew its lodging and convention facilities; and used the Hershey Stadium and Arena to make Chocolate Town a prime-time entertainment venue.
Hatt is also credited with the developing concept that would become Christmas Candylane, allowing the park and Hershey at large to become a popular holiday season destination.
Two personal points of pride, Hatt's friends and former colleagues say, were the continued development of the Hershey Bears into one of America's most enduring and successful minor league sports franchises, and his participation in the birthing of the medical school.
Hatt was elected to the board of the Hershey Trust in 1962. As such, he was the last surviving member of the board that eventually decided to offer Penn State University $50 million to establish a medical school in Derry Township.
"Milton Hershey had always had an interest in medicine," he recalled in a 2009 article in Penn State Medicine. "We thought that establishing a medical school and hospital would be a wonderful way to honor his legacy."
Ground was broken in 1966 and the medical school opened in 1967.
In subsequent interviews, Hatt told The Patriot-News that he considered himself a member of the "third generation" of Hersheyites - people who knew people who worked directly with Milton Hershey.
It was a group, he noted, that took quite personally the idea of staying true to the founder's legacy. "A lot of times, we would be talking about something and we'd ask, 'What would Mr. Hershey say?'" Hatt said.
Hatt acted on that credo several times in retirement:
* In 1998, he criticized the Hershey Trust's pursuit of state funds to help support construction of what would eventually become the Giant Center, arguing HERCO should simply pay for the project itself.
"Milton Hershey and his entities never sought help or relief from the taxpayers' funds, and it should not happen now," Hatt wrote in a memo at the time.
* In 2002, Hatt was one of five former trust managers who publicly opposed the Trust's decision to explore a sale of Hershey Foods. The effort was ultimately dropped in September of that year, after contentious public debate and private deliberations.
It was a devotion that came naturally, said Bruce McKinney, another MHS alum who would succeed Hatt at HERCO in 1986.
"I think he felt he was given an opportunity to go to the school, and like a lot of us, he wanted to make certain that the gift that he received was repaid in double," McKinney said Sunday.
That doesn't mean that Hatt wasn't willing to consider change.
During his tenure as CEO, as Hershey faced pressures from rising gas prices, the Three Mile Island nuclear accident, Hatt presided over discussions about whether HERCO had too many eggs in one geographic basket.
That led to investments outside central Pennsylvania, including hotels in Philadelphia, the Poconos and Corpus Christi, Texas, and a second amusement park in Bristol, Conn.
But when that strategy proved to not be adding strength, McKinney noted, Hatt, still a member of the HERCO board, who joined him in calling for refocusing the company on its midstate base.
"He was a significant factor in that change of direction," McKinney said.
And then there were his beloved Bears.
McKinney said Hatt loved the hockey team, and for many years had Bears management report directly to him, even when he was HERCO CEO. Over a 40-year span, McKinney said, he knew that Hatt had missed only a handful of home games.
In 2013, Hatt was inducted into the Bears' Hall of Fame.
Hatt and his late wife Eleanor, also built a considerable philanthropic legacy of their own, donating, along with his wife, to fund a fellowship in internal medicine and a professorship in neonatal medicine at the medical center.
Outside of his Hershey corporate involvement, Hatt also held leadership positions with the Four Diamonds Fund, the Harrisburg Chamber of Commerce, Capital Region Economical Development, and the Hershey Museum.
Most recently, he was honorary chairman of The Hershey Story capital campaign.
He was also an active Mason, and a member of the Derry Twp. Historical Society, Hershey Rotary Club (past president), Milton Hershey School Alumni Assn. (past president), Hershey Country Club, and the Hershey Volunteer Fire Dept.
Hatt was survived by two nieces: Jill Bowman Laudermilch of Annville, and Jan Bowman Tshudy of Harrisburg; many great nieces & nephews and many close friends. He was predeceased by his wife Eleanor M. (Bowman) Hatt, 7 brothers, and 3 sisters.
A private family service and interment will be held in the Hershey Cemetery. Hoover Funeral Home is handling arrangments.
The family requests that memorial donations go to The Hershey Story, "Share the Story" Scholarship Fund, 63 West Chocolate Avenue, Hershey, PA, 17033. Checks should be made payable to The Hershey Story.
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