I have visited Hershey, Pennsylvania - the scent of chocolate in the air was overpowering. Very interesting; I am glad that it will remain just as it is.
Regards, Ivan
Posted on 09/18/2002 10:46:12 PM PDT by MadIvan
America's largest chocolate business is off the auction block - a sweet victory for campaigners who feared a sale would lead to massive job cuts and the destruction of a small town.
Yesterday the trust that controls Hershey Foods said it had rejected at least two offers for the business, acknowledging that the bidding process had triggered fierce local opposition.
Residents of Hershey in Pennsylvania staged rallies and lobbied trustees to prevent the sale of the company behind the eponymous chocolate bars.
An $89-a-share bid from chewing gum maker Wrigley that valued Hershey at $12 billion was rejected, even though it was much higher than expected and included guarantees for the 13,000 strong community.
A joint bid from Nestle and Cadbury Schweppes of $75 a share, $10 billion, was also turned down on the basis that it undervalued the company.
The Hershey Trust owns a third of the shares and most of the voting rights to the business founded by sweet magnate Milton Hershey in 1894.
The trust exists to pay for local schools and healthcare for workers, but recently felt it should diversify its assets.
Robert Vowler, chief executive of the trust, said the Wrigley offer was largely in shares, which didn't help the diversification issue. He said of the local disquiet: "It was heartfelt. It was emotional. It was painful."
Hershey shares tumbled on the conclusion of the bidding war, losing more than $10 to $63.55 in early trading on the New York Stock Exchange. Hershey's best-known brands are Reese's Peanut Butter Cups and Hershey's Kisses.
Bankers were said to be seething that the Wrigley offer, which they felt was both high and addressed community concerns, was thrown out.
Hours after the announcement, a Pennsylvania court upheld an injunction banning any sale of the company without the approval of the court and the state attorney general. Pennsylvania attorney general Mike Fisher, who is running for governor, led the attempt to block the sale.
According to reports, he first suggested that the trust should diversify its portfolio in the interests of the town.
I have visited Hershey, Pennsylvania - the scent of chocolate in the air was overpowering. Very interesting; I am glad that it will remain just as it is.
Regards, Ivan
Politics interfered with a rational business decision and people who are not owners and have no direct stake in the turnout stuck their noses where they did not belong.
The people of Hershey had better retrain for another profession because all they did was postpone the inevitable closing of yet another buggy whip company. At the same time the trust will find that the value of their assets will drop down dramatically over the next couple of years and then they won't be able to give the company away.
Baloney, this case is not a simple textbook example of capitalism. Debated in detail earlier today: PA AG Mike Fisher devlivers a coup de grace on the sale of Hershey Food(My title).
Three cheers for the locals og Hershey Park, Penn.
After 9-11-01 they stopped all public tours of the facilities. Rumors have been running amok since then about closure and sale of the parent co. I imagine the employees who survived the latest lay-offs breathed a sigh of relief with the news today.
OMG...I've found my Mecca! :-)
The Hershey PA factory strike was one of the most violent and destructive labor strikes in American history. Odd, because the Hershey workers were also some of the best paid and best treated workers in America at the time. I have to wonder how long they'll last. This kind of industry is considered much more profitable outside the US.
They seem to make money doing this in Britain with the Mars factory in Slough, and in Belgium with a variety of chocolate companies. One thing Hershey needs to do, is make their chocolate richer, more decadent, and the money will follow. ;)
Regards, Ivan
Perhaps GWB can install some chocolate tariff (a la steel) to give the Hershey folks time to 'retool'.
(For those who miss the sarcasm, this plan was definitely 'tongue in cheek')
Like you, I am concerned that the emotions of townpeople overpowered the business decisions of a corporation. Time moves on and the business model that made Hershey a profitable company in the past may not work for the future.
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