Hershey Co (NYSE: HSY) shares plummeted
10.7 percent on Tuesday when Mondelez International Inc (NASDAQ: MDLZ) disclosed it is no longer negotiating a possible Hershey buyout. The sharp
drop in Hershey shares represents the largest one-day skid for the chocolate maker since 2002.
The Hershey/Mondelez deal seemed to face an uphill battle from the start. Back in June, Mondelez reportedly offered $23 billion
for Hershey, or about $107/share. Hershey was asking for at least $125/share. Mondelez was reportedly willing to go as high as $115, but
Hershey wouldn’t budge on its asking price.
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Any deal involving Hershey must be approved by the Hershey Trust, which has opposed potential deals in the past. In addition, a
merger of two food companies as large as Hershey and Mondelez would likely have faced intense antitrust scrutiny from
regulators.
Hershey shares spiked from around $97 to as high as $117.15, when the buyout bid was first announced back in June. The stock
then settled back into a trading range between $107 and $114 over the next couple of months before this week’s big fall back down
to below $100.
Shares seem to be stabilizing in early Tuesday trading, up 0.5 percent. Aside from the period since the bid was announced, this
is the first time Hershey’s stock has traded above $100 since early 2015.
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