Aborted Sale Takes $17m Bite from Hershey Profits

21 October 2002

Hershey Foods is over $17 million out of pocket thanks to the abandoned auction of the chocolate and candy colossus.

The Milton Hershey School Trust, which controls the food firm, decided to sell its stake earlier this year, arousing the interest of Nestlé, Cadbury-Schweppes and William Wrigley Jnr Company. However, it ditched the idea when confronted with strong local opposition and legal action [WAMN: 18-Sep-02].

The $17.3m (€17.8m; £11.2m) costs associated with the thwarted sale helped restrict third-quarter growth in net income to 1.9%, up from $120.8m to $123.1m.

Excluding exceptional items, earnings rose from $123.3m to $139.8m, while sales, hit by the successful disposal of several products, dipped from $1.18 billion to $1.15bn.

The earnings release coincided with a ruling by a Pennsylvania judge that the Trust must henceforth inform the state’s attorney-general if it wants to sell the stake.

Data sourced from: Financial Times; additional content by WARC staff