CHICAGO, June 16 The chairman of the trust that
has voting control over Hershey Co (HSY.N) said change is
needed to boost the company's performance and improve the
largest U.S. chocolate maker's position for long-term growth.
He also said the trust, which controls 78 percent of the
voting stock in the company, hired merger-and-acquisition
advisers more than a year ago to look at strategic options for
"Transformational merger-and-acquisition transactions are
but one of multiple strategic growth options the trust has been
continually assessing, in coordination with the company board,
as part of the trust's ongoing process and due diligence,"
Hershey Trust Chairman LeRoy Zimmerman wrote in an opinion
piece published Sunday in the Harrisburg, Pennsylvania
Zimmerman also reiterated that the Trust will not, and
legally could not, give up its control of the company.
"The trust is committed to retaining its controlling
interest in the company," he wrote. "This is first and foremost
a principle grounded in Milton Hershey's philanthropic legacy.
It also is rooted in constraints of Pennsylvania law and
practical business imperatives. Simply put: We will not sell
The Hershey Co."
The Hershey Trust, which despite its control of the company
holds shares representing only about 30 percent of the economic
interest in Hershey Co, was established by Hershey founder
Milton Hershey to serve as trustee for the boarding school that
bears the Hershey name.
Last year the trust, unhappy with the financial performance
of Hershey, arranged an overhaul of Hershey's board.
In the wake of the agreement in April by Hershey rival Mars
Inc to take over chewing gum maker Wm Wrigley Jr Co WWY.N,
analysts have said Hershey needs to make some sort of alliance
with another company to better compete with Mars, which will
become the world's largest candy company.
But the Trust's stance that it must maintain control of
Hershey likely precludes a takeover by a company like Cadbury
Plc CBRY.L. Instead, Hershey may need to opt for a joint
venture with another company to help grow its international
business, analysts said.
Zimmerman's remarks on Sunday appear to allow for such a
move, though he said the question of what growth options the
company will pursue is "an ongoing matter."
"There are meaningful options for dynamic long-term
strategic growth that do not require selling the company. And
it is toward those options that the trust and the company board
are focused," he wrote.
Hershey shares closed at $38.33 on Monday on the New York
Stock Exchange. The stock is down 2.72 percent this year.
(Reporting by Brad Dorfman; editing by John Wallace)