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Mondelēz (MDLZ) announced yesterday it has abandoned its bid for Hershey after deciding “there is no actionable path forwards” for the deal.
Hershey rejected a $23bn offer from Mondelez in late June and subsequent talks have proved fruitless, Mondelez said.
In a statement last night Mondelez chairman and CEO Irene Rosenfeld said: “”As the world’s leading snacking company, we remain focused on successfully executing our strategy to deliver both sustainable top-line growth and significant margin expansion and are well-positioned to continue to deliver value to our shareholders.
“Our proposal to acquire Hershey reflected our conviction that combining our two iconic American companies would create an industry leader with global scale in snacking and confectionery and a strong portfolio of complementary brands.
“Following additional discussions, and taking into account recent shareholder developments at Hershey, we determined that there is no actionable path forward toward an agreement. While we are disappointed in this outcome, we remain disciplined in our approach to creating value, including through acquisitions, and confident that our advantaged platform positions us well for top-tier performance over the long term.”
Mondlez shares were up 3.8% to US$44.68 after the market closed, but Hershey shares dropped 11.7% to US$98.60 in after hours trading on the news.
Morning update
As might be expected it’s a quiet morning after the Bank Holiday yesterday in what looks like being a quiet week.
Over the weekend fast-growing UK popcorn brand Propercorn has confirmed it has received a £7m investment from private equity player Piper and JamJar, the investment vehicle for the three Innocent founders, following The Grocer’s story outlining the deal earlier this month.
The £7m investment is the first major injection of funds in Propercorn’s five years of business and will underpin the brand’s UK and international growth ambitions.
Propercorn was founded in 2011 and has gone on to sell more than three million bags of its popcorn per month as consumers continue to seek healthier and more interesting snacks.
The business employs 40 staff at its London office. As part of the deal, Adam Balon, co-founder of JamJar and Innocent, will join Propercorn as chairman.
The FTSE has started the week up just 0.1% at 6,842.4pts.
Amongst the FTSE 100 grocery/fmcg players, the biggest mover this morning is Associated British Foods (ABF), up 1.8% to 3,002p, while Unilever (ULVR), is up 0.9% to 3,599.5p.
Other risers include Cranswick (CWK), up 2.3% to 2,463p, Finsbury Food Group (FIF), up 1.9% to 126.9p and FeverTree (FEVR), up 1.2% to 993.5p.
Early fallers include WH Smith (SMWH), down 2.7% to 1,526p, Real Good Food (RGD), down 2.1% to 33.5p and Hilton Food Group (HFG), down 1.8% to 576p.
This week in the City
It looks like another quiet week in the City this week before the market starts returning to normal as we move into September.
One notable event this week is the final day of trading for Home Retail Group (HOME) tomorrow before it officially becomes part of Sainsbury’s (SBRY) on completion of the takeover deal on Friday.
In terms of company news the only other item in the diary is a trading update from McColls (MCLS) on Thursday.
Official UK consumer credit data for the month will be released later this morning and the latest GFK Consumer Confidence figures – which have so far seen a sharp post-Brexit drop – will be out first thing on Wednesday.
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