Shares of Hershey Co (NYSE: HSY) soared higher
Thursday morning to a new 52-week high of $117.79 and was trading higher by nearly 20 percent following a report that Mondelez
International Inc (NASDAQ: MDLZ) presented a takeover
bid.
The Wall Street Journal, citing
"people familiar with the matter," stated Mondelez sent a letter to Hershey, which proposed a combination of their businesses.
Terms of any acquisition offer weren't immediately made available but the price tag on a deal would be "well over" Hershey's market
value of $21 billion as of Thursday morning.
However, any acquisition would be contingent on the approval of the Hershey Trust, which holds 8.4 percent of the total common
stock but 81 percent of the voting power. Wall Street Journal noted the Trust has been against selling the company in the past, but
Mondelez is motivated enough to see it is successful in buying the company.
Related Link: Citi
Analysts Dubious Of Hershey Takeover Rumors
Hershey takeovers in the past have seen considerable trouble
being approved, given job reliance by Hershey, Pennsylvania community on the company.
"If the market is defined as the broader U.S. Candy, Mint, & Gum category, a deal between two main confection players would
likely generate scrutiny from the DoJ, but given that the market is moderately concentrated, there could be wriggle room for a
deal," Citi's David Driscoll said on June 15, regarding a potential takeover of Hershey by Nestle
Shares of Mondelez were trading higher by more than 2 percent at $43.84 following the M&A report.
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