Failed bid for Hershey's renews reputation that it cannot be bought

The latest failed acquisition of Hershey Co. has renewed the chocolate maker's reputation as a company that can't be bought.

After Mondelez International abandoned merger discussions on Monday, Hershey shares suffered their worst decline in almost 14 years and left investors with a familiar taste. For years, Hershey has been the subject of takeover speculation. And for years, deal talks have sputtered and died.

Hershey, already struggling with shifting consumer tastes and an ill-fated expansion into China, might now have also scared away future suitors.

"We do not believe another bidder is likely to emerge for Hershey," Chris Growe, an analyst at Stifel Financial Corp., said in a report. "We believe Mondelez's challenge in pursuing Hershey will likely dissuade other buyers from attempting a transaction."

Mondelez's initial $107-a-share offer in cash and stock would have valued Hershey at about $23 billion. The Hershey board said on June 30 that it rejected that bid. Talks continued, but Mondelez said on Monday that it saw "no actionable path forward toward an agreement."

The announcement sent Hershey shares down as low as $98.75 in New York, a 12 percent plunge that erased much of their recent rally. Shares closed Tuesday at $99.65. The stock had climbed 25 percent this year through Monday's close, with most of that gain coming when news of Mondelez's approach became public.

Ending the pursuit of Hershey brought some relief to Mondelez investors, who might have been concerned about a takeover battle. Shares of the Deerfield, Ill.-based company closed up $1.70 Tuesday at $44.74.

Mondelez CEO Irene Rosenfeld, who saw the deal as a chance to create the world's largest candy company, lamented that the two sides couldn't reach an agreement. "Combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery," she said.

The merger would have given Mondelez a bigger share of the domestic market — a weak spot for the maker of Oreos and Triscuits. Hershey generated almost 90 percent of its revenue in North America last year.

"The strategic fit with Mondelez was pretty compelling," Bloomberg Intelligence analyst Ken Shea said. "Not a lot of other companies can do that kind of combination."

Hershey owns the Cadbury license in the U.S., while Mondelez sells the candy in the rest of the world. Unifying that brand was considered part of the rationale for the merger.