Hershey Sale Has Big Hurdle
Potential bidders for Hershey Foods Co., the confectionary giant put up for sale last month, are losing interest after discovering that 14,000 employees qualify for severance benefits that could add some $400 million to the cost of buying the business, the Times of London reported on its online edition Sunday.
The benefits are thought to give a wide range of employees up to three times base salary and last for two years after a change of ownership, the newspaper reported. That cost would be onerous for a buyer looking to cut the work force to save costs, the report added.
Officials at Hershey could not be reached for comment.
The Hershey, Pa.-based candy manufacturer, which makes Hershey’s chocolate bars and other well-known brands, was put up for sale by the Milton Hershey School Trust, a charitable organization that controls 77% of Hershey’s voting power.
Analysts speculated that Hershey could fetch $12 billion or more, with Nestle and Kraft Foods Inc. seen as likely bidders.
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