HARRISBURG, Pa. (AP) — Shares of The Hershey Co. rebounded Tuesday after Kraft Foods Inc. increased its offer for British candy maker Cadbury PLC, all but shutting out competition from the smaller U.S. candy maker.
Hershey shares rose $1.46, or 4 percent, to $37.71 in midday trading.
They had slid below $37 — from above $40 in October — as speculation grew that Hershey might bid for Cadbury.
Neither Hershey nor the charitable trust that controls it commented Tuesday on Kraft's new bid.
Morningstar analyst Erin Swanson said in an interview that investors appear relieved Hershey seems out of the running. Analysts said a Hershey bid would have required it to take on lots of debt and would have weighed down the company's balance sheet.
The Hershey, Pa.-based company makes Hershey's Kisses and Reese's peanut butter cups.
It will either have to hope its fledgling joint ventures in fast-developing countries such as China and India grow quickly or use a piecemeal approach to acquisitions if it now wants to expand globally, analysts said.
"I don't think there's (another) potential deal out there that would give them that distribution exposure" that Cadbury offered, Swanson said.
