NESTLE MAY BUY HERSHEY TRUST WON'T BAR WHAT'S POTENTIALLY THE SWEETEST DEAL IN CANDYLAND.Byline: Brent Hopkins Staff Writer
GLENDALE - Analysts say Kit Kat KIT KAT Keep In Touch - Kall Any Time bars could give Nestle a break in an attempted acquisition of fellow chocolate giant Hershey Foods Corp., as discussion heated up Friday about the sale of one of the food world's most storied brands.
The Pennsylvania-based chocolatier choc·o·la·tier
1. One who makes or sells chocolate.
2. A place where chocolate is made or sold.
[French, from chocolat, chocolate, from Spanish chocolate , known for its eponymous bars and Kisses, made waves through the food community earlier in the week when rumors began circulating that its majority controller, the Milton Hershey School The Milton Hershey School is a private philanthropic (pre-K through 12) boarding school in Hershey, Pennsylvania. Originally named the Hershey Industrial School, the institution was founded and funded by chocolate industrialist Milton Snavely Hershey and his wife Catherine Trust, was looking to sell. The trust confirmed the rumors Thursday with a statement acknowledging it was considering a full sale of the company. Nestle, currently third in the market, quickly emerged as a front-runner in a deal that could run as high as $14 billion.
``Nestle has been sort of voracious voracious
said of appetite. See polyphagia. in its appetite for takeovers and mergers,'' said Sally Schaadt, an analyst for the New York-based independent research firm The Fourteen Research Corp. ``They immediately come to mind. A lot of the speculation was on the basis that Hershey distributes the Kit Kat bar. People figured there was already an arrangement and perhaps they would be able to get together.''
Nestle's acquisition binge brought it the Ralston Purina Co., Haagen- Dazs, German ice cream maker A domestic ice cream maker or ice cream freezer is a machine used to make small quantities of ice cream at home. Ice cream makers may stir the mixture by hand-cranking or with an electric motor, and may chill the ice cream by using a freezing mixture, by pre-cooling the Schoeller Holding AG and Dreyer's Grand Ice Cream Inc. in recent years. Based on those past purchases, Schaadt said, Hershey could ease seamlessly into Nestle's overall portfolio.
``Nestle is very clever about marketing and fitting things together,'' she said. ``The purchase would definitely be beneficial to them if they don't pay too much.''
Though Kraft Foods Kraft Foods Inc. (NYSE: KFT) is the largest food and beverage company headquartered in North America and the second largest in the world after Nestlé SA.
The Philip Morris Company (now known as Altria Group), a company that produces tobacco products, acquired Kraft for Inc. and Cadbury Schweppes Cadbury Schweppes plc is a confectionery and beverage company with its headquarters in Berkeley Square, London, England, UK. Cadbury Schweppes is currently the only major international confectionery manufacturer to produce Fairtrade or organic products, which it sells through its have also been discussed as likely suitors, Glendale-based Nestle, the domestic arm of a Swiss parent company, looks like a likely candidate.
``Nestle is probably at the top of the list,'' said Patrick Schumann, a consumer analyst for broker Edward Jones' St. Louis office. ``With a broad portfolio, presence in confection con·fec·tion
A sweetened medicinal compound. Also called electuary. and deep pockets, it would make a lot of sense for Nestle to have Hershey.''
Neither firm was interested in discussing the speculation Friday.
``It's our corporate policy not to comment on rumors,'' said Kimberly Constant, a spokeswoman for Nestle. ``That's our comment.''
Hershey offered only slightly more.
``It's too early to predict the outcome of this exploratory process,'' spokesman John Long said. ``I can't really give a comment on potential buyers or even anything else, because we're in a process that will take months to complete.''
Emotions run high about the sale of Hershey, a company that dates back to 1894 and lent its name to its headquarters' town. Originally designed to support an orphanage founded by Milton Hershey, the chocolate stalwart enjoys a relationship with its community that has become extremely rare in modern business. Given that relationship, a sale would be extremely closely watched. Though those who follow the company were stunned stun
tr.v. stunned, stun·ning, stuns
1. To daze or render senseless, by or as if by a blow.
2. To overwhelm or daze with a loud noise.
3. by its announcement, most agree the sale is eventually inevitable.
``I don't think they'll change the name of the town to Nestle, Penn.,'' said Prudential Securities food analyst John McMillin. ``That would be nice (if the Hershey trust did not sell), but they're beyond the point of no return. They've opened themselves to lawsuits if they don't auction it.''