NEW YORK – The head of Hershey Trust Co., which holds a majority of voting shares in chocolate maker Hershey Co. (HSY), said the company was not for sale, despite a media report that a new takeover bid could be in the offing.
"Our position is what it has been, which is the company is not for sale," Robert Vowler, president and chief executive of the trust, told Reuters.
The trust controls 78 percent of the voting shares in Hershey Co. and 31 percent of the economic interest.
Business Week reported in its March 27 edition that a bid may surface for Hershey, citing Michael Metz of Oppenheimer, which owns Hershey shares. The bid might be "difficult to resist," the magazine quoted Metz as saying.
A Hershey Co. spokesman declined to comment on the report.
A bid for Hershey could rekindle passions that were inflamed in 2002 in Pennsylvania, the company's home state, when Hershey was nearly sold.
The company initially put itself up for sale then under the urging of the Hershey Trust Co.
But former students of the Milton Hershey School, the beneficiary of the trust, and others in the Hershey community came out in full force against a sale and the Pennsylvania attorney general sued and won an injunction to stop a deal.
Still, Hershey received a $12.5 billion bid from. Wm Wrigley Jr. Co. (WWY). But under pressure, the trust called off the sale plan and said the Wrigley bid was rejected because the offer was in cash and stock and would have complicated the trusts' diversification efforts.
Another bid of $10.2 billion from Nestle SA and Cadbury Schweppes Plc was rejected as too low, the trust said.
The majority of the Hershey Trust later left in an overhaul of the body.
Vowler said Friday that "nothing significant has changed" in the regulatory landscape that would make a sale more likely today than in 2002.
Hershey has been one of the better performing companies in the U.S. food sector, using acquisitions and new products to drive sales increases that exceeded the category.
But that pace has slowed of late and has put pressure on the company's stock. Hershey shares are down 3.5 percent since the beginning of the year, compared with a 5.5 percent increase for the Dow Jones U.S. Food Producers Index.
Hershey shares were up 76 cents at $53.27 at midday on the New York Stock Exchange. The stock is down more than 20 percent from the 52-week high of $67.37 set on May 12, 2005.