RPT-Hershey Trust head’s quandary: a kiss for Cadbury? PDF Print E-mail
Friday, 27 November 2009 07:00

(Repeats story issued that originally ran on Wednesday.)

By Clare Baldwin

HERSHEY, Pennsylvania, Nov 25 (Reuters) – To LeRoy
Zimmerman, the taste of chocolate will always mean Hershey’s.

But now the head of the charitable trust that controls the
Hershey Company must contemplate a risk-everything deal that
would tie its fate to the much larger British chocolatier
Cadbury Plc (CBRY.L).

“I was born and raised in this area — not in Hershey, but
in Harrisburg — and to me the taste of chocolate is
Hershey’s,” said Zimmerman, who heads the eight-member Hershey
Trust.

“I mean that. I’ve eaten in Europe all that stuff that’s
there. But the taste of chocolate is Hershey’s to me and
millions of Americans,” said Zimmerman at the doorstep of his
spacious home on a leafy suburban street outside Harrisburg.

Zimmerman is seen as one of the leading figures pushing for
change at Hershey as it contemplates a $17 billion-plus
David-eats-Goliath bid for Cadbury. It would also stare down
U.S. food group Kraft, which is in the midst of a hostile
takeover campaign for Cadbury.

Zimmerman, now in his mid-70s, became Pennsylvania’s first
elected attorney general in 1980 and now serves as senior
counsel at the law firm Eckert Seamans Cherin & Mellott. Known
as a “power broker of central Pennsylvania.”

Approached on two occasions this week, Zimmerman would not
talk about the effort to orchestrate financing and political
support for a deal that would require the 100-year-old Hershey
to take on a company more than twice its size. [ID:nN23257449]

But it is clear that Zimmerman, whose firm keeps two large
jars of Hershey kisses in its lobby, may risk taking on an
ambitious deal that could change the identity of Hershey. Doing
nothing could allow Kraft to create the world’s largest
confectioner with Cadbury, ahead of current No. 1
Mars-Wrigley.

Hershey missed an attempt to sell itself to Wrigley in 2002
as the Trust came under pressure from community groups, while a
previous effort to link up with Cadbury in 2007 also fell
apart. Those same tensions could be at work in a new deal,
according to people familiar with the company.

“If you look at what extremes the Trust would have to
accept in order for Hershey to be able to acquire Cadbury, it
actually violates one of the fiduciary responsibilities of the
Trust where you’re putting everything at risk,” said a former
employee, who worked with the company for 30 years.

25-YEAR TRAJECTORY

People who know the Trust describe it as a conservative
group that nevertheless must plot its strategy over long years
to ensure its central mission in administering the Milton
Hershey School for children in need.

“As any corporation they have to make a profit. If they’re
not profitable it’s hard to be philanthropic. They have been
very generous throughout the history of their involvement in
this town. I wouldn’t expect that to change,” said Skip Memmi,
who has served on the Derry Township Board of Supervisors for
more than 14 years.

Hershey is a town by its postmark and zipcode alone, a
tribute to the factory that long supported its residents. But
the land it sits on is incorporated as the Derry Township.  Continued…

Continue reading here:

RPT-Hershey Trust head’s quandary: a kiss for Cadbury?

 

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