Snack-food giant Mondelez has made an offer to acquire Hershey, according to a Wall Street Journal report.
Following the report, shares of Hershey were up as much as 21%, to north of $117 per share. Mondelez shares were up about 1.7%.
A follow-on report from CNBC, citing sources, said that Mondelez has bid $107 per share for Hershey with the deal comprised half in stock and half in cash. This sent shares of Hershey off their best levels of the morning, up about 15% to around $113.
Hershey has a market cap of about $25 billion; Mondelez has a market cap of about $68 billion. Mondelez was spun out of the unit of Kraft Foods that purchased Cadbury.
CNBC’s David Faber added that talks between the company have been going on for a few months. According to WSJ, Mondelez has pledged to protect jobs in the event of a merger, locate its headquarters in Hershey, Pennsylvania, and rename the company Hershey.
Activist investor Nelson Peltz and Bill Ackman’s Pershing Square both hold sizeable stakes in Mondelez. Ackman first took a $5.5 billion stake in Mondelez in August 2015, but has since sold down his share in the snack-maker, unloading about 20 million shares in March.
Mondelez has long been a target of activist investors, with Peltz publicly agitating in 2013 for Pepsi to acquire Mondelez in a more than $65 billion deal.
Following this report, shares of other food companies rose, including Kellogg (+4%), Campbell Soup (+3.6%), Hain Celestial (+2.1%), General Mills (+4.2%), and PepsiCo (+2%).
Here’s the spike in Hershey stock in Thursday morning trading.
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