MDLZ Mondelez International Inc

By Tess Stynes and Dana Cimilluca 

Mondelez International Inc. ended its bid to acquire Hershey Co. after the famed chocolate-bar maker rebuffed a new takeover offer and indicated it would be difficult to strike a deal before next year.

Mondelez said in a statement after the market closed Monday that it determined there was "no actionable path forward" its bid to buy its smaller rival.

The Wall Street Journal reported in June that Mondelez made a roughly $23 billion bid for Hershey, a tie-up that would create the world's largest candy maker. Hershey rejected the offer, which amounted to $107 a share, half in cash and half in stock.

Mondelez Chief Executive Irene Rosenfeld privately indicated to Hershey officials a willingness to raise the bid to $115 a share last week, according to a person familiar with the matter. Hershey responded that the starting point for discussions would need to be $125 a share. Hershey also indicated that the trust that controls the company, which has been in turmoil, would need to complete a reconstitution before there could be a deal--something unlikely to happen until next year, this person added.

Both Hershey and Mondelez, which is based in Deerfield, Ill., have been under pressure amid a trend toward more-healthy eating and other factors.

Any takeover of Hershey, known for its namesake Kisses and chocolate bars, faced multiple obstacles. A deal would require the approval of the Hershey Trust, its largest shareholder, which has opposed a sale in the past.

Ms. Rosenfeld said in prepared remarks Monday that while the company was disappointed, it remains focused on its efforts to deliver sustainable sales growth and stronger margins. Mondelez will be disciplined in its approach to generating value, including through acquisitions, she added. Indeed, Mondelez called off the pursuit because the deal was attractive but not essential and because it was eager to avoid overpaying, the person said.

Hershey shares slumped on the news, falling more than 10% after hours to under $100 a share after closing at $111.67. Mondelez, meanwhile, rose 3.6% after closing at $43.04.

The maker of Oreo cookies and Cadbury chocolate plans to provide more details at an upcoming industry conference on Sept. 7.

The Journal reported last month that the Hershey Trust, which oversees billions of dollars for a local, nonprofit school had agreed to make significant governance changes that could affect the future of the chocolate company, citing people familiar with the matter. The trust agreed on terms of a settlement with Pennsylvania's top law-enforcement officer, which has been investigating the trust board over allegations of excessive compensation and conflicts of interest.

Earlier in July a board member of the trust controlling Hershey resigned, another sign of uncertainty at the famous chocolate maker.

--Annie Gasparro contributed to this article.

Write to Tess Stynes at tess.stynes@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

August 29, 2016 17:26 ET (21:26 GMT)

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