The trust that holds a controlling stake in Hershey Foods is meeting today [Tuesday] to discuss how it moves forward with its proposed sale of the company.
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A Pennsylvania court has enjoined the trust from selling Hershey while it considers an appeal from opponents to the sale. Local opposition to the proposed sale is likely to slow the sale process and could even make it impossible.
Accordingly, the trustees are likely to spend much of today’s meeting examining ways in which they can diversify the trust’s assets in other ways. Sources close to the trust told the Wall Street Journal that a senior member is expected to present the trustees with a proposal to scrap the sale altogether and instead diversify the trust’s holdings through a series of share buybacks over a number of years.
This option would be a slower means of diversifying the trust’s assets. The trust holds 77% of Hershey’s voting stock and owns 31% of its common shares, and is keen to diversify its portfolio further beyond the chocolate group.
Meanwhile, bidders continue to prepare their offers for the chocolate company, with frontrunners Nestlé and Cadbury-Schweppes reported to be tweaking the fine print of a joint bid approach. No deadline has been set for bids.
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