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HERSHEY, Pa. -- The charitable trust that controls Hershey Foods Co. said it has proposed a sale of the nation's largest candy maker, which reportedly could fetch more than $10 billion.
The Milton Hershey School Trust, which owns 77 percent of Hershey's voting shares, requested that the company be put up for sale, saying that a possible sale "was the most prudent course of action consistent with its diversification objectives and its fiduciary obligation to the Milton Hershey School," according to the Wall Street Journal.
The possible sale of Hershey could be the largest auction of a food company since Nabisco was sold to Kraft for $14.91 billion. Hershey has $4.6 billion in annual sales, and controls 31 percent of the U.S. confectionery market, the report said.
The potential price for Hershey could amount to roughly $80 a share, or more than $10 billion. Potential bidders for Hershey include Kraft, Nestle SA, PepsiCo Inc. and Cadbury Schweppes PLC, the Journal reported.
While Hershey contemplates a sale, Diageo plc yesterday reached an agreement with a consortium of U.S. venture capital firms led by Texas Pacific Group to sell its Burger King hamburger unit for $2.26 billion in cash.
The long-awaited deal, reached after days of intense negotiations, is crucial to Diageo's strategy of focusing on its more lucrative business of making and selling alcoholic beverages. The company's best-known brands include Johnnie Walker scotch, Guinness beers and Bailey's Irish Cream liqueur.
London-based Diageo, the world's largest liquor company, has long said it planned to unload Burger King in a sale or spinoff. The Texas Pacific Group-led consortium emerged as the sole contender to buy Burger King after two rounds of bidding, a source familiar with the talks told the Associated Press.
Texas Pacific is believed to have close ties with senior executives at Burger King and has practical experience with the fast-food franchise business from its ownership of the Domino's Pizza chain. These contacts and knowledge about the fast-food industry appear to have given the consortium a competitive edge against other would-be buyers of Burger King, the source said.
Second only to McDonald's, Burger King has more than 11,435 restaurants worldwide. The deal is expected to close by the end of the year.