Mondelez makes $23 billion takeover bid for Hershey -source

By Lauren Hirsch

REUTERS - Mondelez International Inc made a $23 billion takeover offer for Hershey Co, looking to create the world's largest confectioner, a person familiar with the matter said on Thursday.

A merger of two of the world's top five candy makers would bring Hershey's strong U.S. business to Mondelez's global footprint. The combined company would leapfrog Mars Inc, which has 13.3 percent of the global market, according to data firm Euromonitor International Ltd.

The bid also pits Deerfield, Illinois-based Mondelez against the Hershey Trust, one of Pennsylvania's wealthiest charities. The trust has about 80 percent of Hershey's voting rights and in 2002 prevented the Hershey, Pennsylvania-based company from being acquired by Wm. Wrigley Jr. Co for $12 billion.

Mondelez has offered $107 per share, half in stock and half in cash, the source said. Hershey shares jumped 15.1 percent to $111.86, while Mondelez rose 2.3 percent to $43.97.

Tigress Financial Partners LLC analyst Philip Van Deusen said he expected the offer price to increase, given the rise in Hershey shares.

"I think ($107) is a good starting place," he said.

Hershey received Mondelez's preliminary offer this week and has yet to respond, the source said. Mondelez plans to keep the Hershey name and preserve jobs as well as help the company expand internationally, the person added.

Mondelez and Hershey declined to comment.

The Wall Street Journal first reported the offer. The source request anonymity because the bid is not public.

Analysts have been skeptical of takeover bids for Hershey in the past. "The Trust ... is outwardly very committed to keeping the company independent," Bernstein analyst Alexia Howard had said in June last year. "So it's pretty much impossible for an activist to get involved or for the company to be bought."

(Reporting by Lauren Hirsch in New York; Additional reporting by Chris Prentice in New York and Sruthi Ramakrishnan in Bangalore; Editing by Lisa Von Ahn)