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July 12, 2016

Hershey Trust board member ‘resigns’ 

A board member of the Hershey Trust has reportedly resigned in the wake of a takeover bid for the chocolate group from Mondelez International. 

A board member of the Hershey Trust has reportedly resigned in the wake of a takeover bid for the chocolate group from Mondelez International. 

It became public thatMondelez had launched a near US$23bn bid to acquire Hershey, which was turned down by the Hershey board, at the end of last month.

A takeover cannot go ahead without the backing of the Hershey Trust, which controls over 80% of Hershey’s voting rights. The Trust was established by the chocolate maker’s founder, Milton Hershey, and it has acted as a barrier to previous M&A, including a 2002 takeover attempt by Wrigley. 

According to Reuters, Trust board member Joan Steel, resigned over the weekend without giving a reason for her. The charitable trust is searching for a replacement but its remaining nine members are understood to be continuing to conduct business. 

Three other board members—Stephanie Bell-Rose, John Fry and Richard Zilmer— have resigned from the trust since late 2015. 

The trust is under continuing investigation by the attorney general’s office into alleged overpayment of directors and conflicts of interest. The Pennsylvania Attorney General’s office has oversight of the Trust under state law. 

The news of Steel’s resignation has increased uncertainty over the chocolate maker’s future in the face of Mondelez’s pursuit. 

For our analysis of Mondelez’s hostile bid for Hershey, click here.

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