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NEW YORK - Two of the world's biggest food companies - Nestle and Kraft Foods - are expected to lead the pursuit of Hershey Foods, whose controlling shareholder announced it would be selling its stake in the renowned chocolate-maker. A bidding war looms, according to a report by FT.com, which put the value of the company at up to $12 billion.
Other obvious suitors include leading confectionery companies Cadbury Schweppes, Wrigley, and Mars - thought the privately held maker of Snickers bars and M&Ms would most likely face antitrust hurdles. PepsiCo was also named as an interested buyer.
Hershey is the nation's leading chocolate company, with brands such as Hershey's Kisses, Reese's peanut butter cups, and Twizzlers liquorice commanding some 31 percent of the confectionery market.
Yesterday the Milton Hershey School Trust, which holds about one-third of the equity and three-quarters of the voting power of Hershey Foods, said it was considering selling its stake in order to diversify its assets.
Hershey Foods c.e.o. Rick Lenny, who has been pilloried in recent weeks by striking chocolate factory workers, expressed dismay at the sale, saying Hershey's board had wanted to keep the company independent. He said the board had proposed a "specific alternative" to the Milton Hershey School Trust, but that the trust rejected the proposal.
The trust runs the Milton Hershey School, a boarding school for disadvantaged children.