Hershey Rejects Mondelez's Takeover Offer

(Reuters) – Hershey's main controlling owner has rejected Mondelez (NASDAQ:MDLZ) International's preliminary takeover offer, deeming it too low, Bloomberg News reported on Wednesday, citing sources.

Earlier this week, Bloomberg reported that Mondelez was exploring the acquisition of the chocolate maker Hershey, potentially leading to one of the world's largest confectioners.

The Hershey Trust Company's approval is crucial for any takeover deal due to its voting control of the company.

Neither Hershey nor Mondelez immediately responded to Reuters' requests for comments.

Earlier in the day, Mondelez stated it would focus on "bolt-on" deals, similar to its recent acquisitions of Chipita, Clif, and Ricolino. They also announced a share buyback program of up to $9 billion.

Mondelez's 2022 deals with Chipita, Clif, and Ricolino were all under $3 billion. In contrast, Hershey has a market capitalization of about $38 billion, according to LSEG data.

Mondelez had previously attempted to acquire Hershey in a $23 billion deal in 2016, but the overture was rejected by the Hershey Trust.

At that time, Reuters reported that Hershey would not entertain negotiations for less than $125 per share.

The Hershey Trust was established by the company's founder over a century ago and is a charitable organization with the Milton Hershey School as its sole beneficiary.

Hershey shares surged as much as 19% on Monday following news of Mondelez's bid but were down 3.3% on Wednesday, while shares of Mondelez rose 3.5%.