Willy Wonka would love this delicious merger rumor racing through Wall Street: Hershey could be purchased by the owner of Cadbury and Oreo.
Hershey stock zoomed as much as 21% to an all-time high and was halted twice for volatility on Thursday after The Wall Street Journal reported the potential blockbuster deal.
Food giant Mondelez recently sent Hershey a letter making a bid to acquire the iconic chocolate company, the Journal reported.
The report said it’s not clear how much the offer was worth, but CNBC reported the bid was $107 a share. That would be 10% above Hershey’s closing price on Wednesday.
Neither Hershey nor Mondelez responded to requests for comment on the M&A buzz.
Investors wasted no time gobbling up the rumors. Hershey stock is on track for its biggest one-day rally since 2002, according to FactSet. Even Mondelez stock rose 2%, despite the fact that acquiring companies often lose ground on deal rumors.
Other food stocks also seemed to benefit from the takeover talk in the normally-quiet industry. Shares of cereal makers Kellogg and General Mills rose about 4% on Thursday, while Campbell Soup gained over 3%.
A tie-up between Hershey and Mondelez would be huge, marrying two of the biggest chocolate brands in the world. But it would have to first be approved by the Hershey Trust, the shareholder that owns the vast majority of the candy giant’s votes and has been reluctant to sell in the past.
However, Hershey shares have struggled to keep up with the broader markets the past few years. And Mondelez may be trying to “sweeten” the deal. Mondelez has promised to protect jobs, move its global chocolate headquarters to Hershey, Pa and rename the company Hershey, the Journal reported.