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Mondelez's Bid May Find Chink In Hershey's Armor

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Mondelez's Bid May Find Chink In Hershey's Armor
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Mondelez International Inc (NASDAQ: MDLZ) still has a glimmer of hope in acquiring Hershey Co (NYSE: HSY), despite the latter's unanimous rejection of the former's $23 billion cash and stock offer.

It is not easy to acquire Hershey, known for its namesake Kisses and chocolate bars, as any transaction would require the approval of the Hershey Trust, which holds 8.4 percent of shares and 81 percent of its voting power.

Related Link: 4 Potential Reasons Mondelez Bid For Hershey

But, now Hershey's "once impenetrable defenses" are looking weaker amid a probe into the Hershey Trust, as well as controversy facing the Pennsylvania Attorney General (AG), who also has a say in any change in Hershey Co's ownership.

A Reuters report stated the trust "is now being investigated by the Pennsylvania AG's office for how much it spends and how long its directors have served for."

"The AG's office has called for the resignation of three of its longest tenured employees. Separately, this year, the Trust fired its executive vice president, after he pled guilty to wire fraud associated with campaign contributions," the report went on to say.

Reuters added that the current AG in Pennsylvania, Kathleen Kane, is set to go on trial next month for allegedly leaking lewd and bigoted emails between prosecutors and judges to a reporter.

At the time of writing, shares of Hershey were trading flat on the day around the $112.55 mark, while Mondelez gained 0.99 percent to $45.56.

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