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KING OF PRUSSIA, Pa. - Late Tuesday Hershey Trust Co. officially removed Hershey Foods Corp. from the auction block, The Associated Press reports.
"The trust board has rejected all the bids that it received," Hershey Trust Co. spokesman Rick Kelly said, reading a statement from board members. "It is asking the company to end the process of exploring the sale."
The nation's largest candy maker had been expected to receive bids as high as $15 billion from food giants such as Kraft Foods and Wm. Wrigley Jr. Co. Experts said the board's decision was likely influenced by local leaders who argued a sale would have devastated the economy of Hershey, Pa., where the company was founded more than a century ago.
The $5.9 billion trust, which controls 77 percent of the company's shareholder votes and 31 percent of its common stock, made the surprising announcement July 25 that it had ordered Hershey Foods executives to seek bids on its stake.
The trust, whose sole beneficiary is the Milton Hershey School for disadvantaged children, said selling the company would protect its investments because more than half the trust's assets are invested in the company's stock. Board members say the trust could be hurt if the company's finances falter during these rough economic times.
But the potential sale sparked protests from the public and politicians, who said the interests of the community would be pushed aside in any sale. Critics said a sale would trigger plant closings and layoffs.
A state judge granted an injunction on a sale, pending a Hershey Trust appeal. State Attorney General Mike Fisher had petitioned the judge to require the trust to seek court approval before it could sell the candy maker.
Even so, the board had been close to selling the company for $12.5 billion to Wrigley before changing its mind, The Wall Street Journal reported Wednesday, citing people familiar with the situation.