Stock in US confectioner Hershey Foods fell 12% on the New York Stock Exchange yesterday [Wednesday] as news broke that the trust that controls most of the company had taken it off the auction block.
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Shares in Hershey Foods plummeted nearly 12% to US$65, approximately their value before the trust said it would sell its stake. Back in late July, when Hershey was put up for sale, the company’s stock price rose in one day from US$62.50 to US$79.49.
The trust’s chairman and chief executive Robert Vowler said that the trust would continue to explore alternatives. US gum maker Wrigley had emerged the favourite to buy the trust’s stake, offering an arguably over-generous US$12.5bn, but Vowler said that the Wrigley offer would not have achieved the diversification of assets the board was seeking.
Meanwhile, local concern at the trust’s initial decision to sell has been eased by the yesterday’s climb down, but grassroots resentment lingers on. Kathy Taylor, a local attorney who campaigned vigorously against the sale, said that her next goal was to have members of the trust’s board replaced, “not in a punitive way, but as a pre-emptive measure […] How long this particular board of trustees will go before they try this again, I don’t know,” she said.
For more news on Wrigley’s reaction to the news, click here.
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