Hershey Co. on Thursday wasted little time shooting down Mondelez International's attempt to buy the storied chocolate maker.
On Thursday morning, the Wall Street Journal reported that Mondelez had approached Hershey about a deal, even suggesting the maker of Oreo cookies would change its name to Hershey and base its chocolate operations where Hershey operates to sweeten the deal.
Such details were apparently not sufficient for Hershey's board, which unanimously rejected the interest from Mondelez, Hershey said on Thursday afternoon.
Hershey's comments suggest the company has no interest in negotiating with Mondelez.
The Company's Board of Directors, after receiving input from the Company's management and its outside financial and legal advisors, carefully evaluated the indication of interest. Following this review, the Board of Directors of the Company unanimously rejected the indication of interest and determined that it provided no basis for further discussion between Mondelēz and the Company.
The Company's Board of Directors and management team are committed to enhancing value for all stockholders in accordance with the Company's strategic plan.
While Hershey rejected Mondelez's initial approach, Mondelez or another suitor could offer more money to try and win over the Hershey board. Any board of directors would have to consider a takeover offer if it appears to be one in the best interest of the company's shareholders.
Hershey confirmed some details of Mondelez's approach, saying that Mondelez sent a preliminary, non-binding indication of interest to buy Hershey for a mix of cash and stock totaling $107 per Hershey share, along with other non-monetary considerations.
Hershey was trading below $98 per share before the Wall Street Journal's report sent the stock soaring above $117. The stock was then halted by the New York Stock Exchange for news pending, and later trading around $113 per share.
Mondelez, which declined to comment earlier on Thursday on the deal chatter, could not be immediately reached for comment following Hershey's response.
Following Hershey's comments, RBC Capital Markets analyst David Palmer said that he does not believe Hershey will ultimately be acquired by Mondelez. He said the interest from Mondelez "may encourage more aggressive cost reduction at Hershey." He also said he still believes Mondelez is most likely an acquisition target for Kraft Heinz.
If Mondelez were to acquire Hershey, it would vault the company back to being the world's largest confectionary company. Mondelez ceded the top spot to Mars in 2015, according to data from Euromonitor International.