Cadbury spurned in Hershey bid

CONFECTIONERY giant Cadbury Schweppes has been dealt a hefty blow after its bid for Hershey, the iconic US chocolate maker, was turned down.

The Hershey Trust Company, a charitable trust which owns 77% of the shareholder voting rights in Hershey Foods, said it had rejected all bids and was ending the auction. It cited fierce opposition to the sale from Pennsylvania lawmakers and Hershey's local community, which feared it would lead to plant closures and swingeing job cuts.

Cadbury is understood to have been working on a joint bid with Switzerland's Nestlé. Kraft Foods had also been seen as a likely contender to snap up the 108-year-old chocolate maker. Wall Street analysts had said Hershey could fetch up to $12bn (£7.8bn). The business is famous for American snack favourites such as Reece's Peanut Butter Cups and Hershey's Kisses.

The announcement that the sale was off followed a 10-hour meeting of all 17 trustees at a suburban hotel in Philadelphia. 'This is the culmination of months and months of reviewing the diversification options,' said Rick Kelly, a spokesman for the Hershey Trust Company.

The vote was a victory for Pennsylvania Attorney General Mike Fisher, who publicly asked the trust to consider alternatives to a sale and later won an injunction blocking any transaction until a judge could determine whether a final deal required court approval. The trust appealed against the injunction, which remains in place, but a High Court has yet to rule.

The $5.9bn trust had sought bids for the chocolate maker in a effort to reduce its exposure to one company.