Hershey's major shareholder pledges to keep power

(Repeats story issued on April 1)

By Jonathan Stempel

NEW YORK, April 1 (Reuters) - Hershey Co.'s (HSY.N) controlling shareholder on Sunday said it has no interest in giving up its voting power, damping speculation the largest U.S. chocolate maker might combine with Britain's Cadbury Schweppes Plc (CBRY.L).

LeRoy Zimmerman, chairman of Hershey Trust Co., said the trust has "absolute confidence" in Hershey management, including Chief Executive Richard Lenny, and its plans to cut costs and regain market share from rivals including Mars Inc.

"The trust has always maintained that it has absolutely no interest in losing control," Zimmerman, a former Pennsylvania attorney general, said in an interview. "We have 78 percent voting control, and we have no interest in losing that."

Zimmerman said Hershey should expand globally, but labeled talk of a possible tie-up with Cadbury "speculation." He declined to discuss specific potential transactions.

Hershey's roots date to 1894. Hershey Trust Co. exercises voting rights on behalf of the Milton Hershey School Trust, for which it has been as trustee since 1909.

Speculation about a possible tie-up with Cadbury rose last month after the British company said it would split in two.

Cadbury plans to separate its confectionery unit, whose products include Dairy Milk chocolate and both Trident and Dentyne gum, from its drinks unit, which makes Dr. Pepper, Hawaiian Punch, 7Up and Snapple.

The split-up is expected later this year. On Saturday, the Wall Street Journal said Cadbury might be able to pursue a combination with Hershey.

Hershey products include its namesake Kisses, and its brands include Reese's, Jolly Rancher, Kit Kat, Mounds and Almond Joy, and Twizzlers, among others.

The company's shares closed Friday at $54.66, giving it a market capitalization of about $12.6 billion.

Cadbury's market value is about $26.9 billion (13.7 million pounds). Analysts have estimated the company's confectionery business, the world's largest, might be worth $16 billion to $17 billion.

HERSHEY REFOCUSES

Hershey is trying to increase sales by focusing on traditional chocolate brands, and developing lines such as premium dark chocolate. It has pared back "limited edition" products because retailers grew less willing to sell them.