Sources say Mondelez made a takeover approach for Hershey

The cookie and snack giant Mondelez An initial possession method has been created for HersheyA combination that would create one of the largest food and beverage businesses in the world, according to people familiar with the matter.

Shares of the legacy chocolate maker jumped more than 10 percent on the news. Mondelez made a previous takeover bid for Hershey in 2016, which the company rejected.

Hershey has hired consultants to help respond to the interest, one of the people said. Mondelez took the view shortly after Hershey reported third-quarter earnings that missed analysts’ expectations last month, the person said.

Hershey declined to comment on “market rumors and speculation.” Mondelez and Hershey Trust, which controls about 80 percent of the chocolate maker’s voting stock, did not immediately respond to requests for comment. Bloomberg first reported. Mondelez’s approach.

Hershey’s stock is up more than 4% this year, giving it a market cap of $39.19 billion. Prior to Monday’s move, the shares had fallen 6% this year, hurt by concerns about increased use of GLP-1 drugs and rising cocoa prices.

Mondelez shares fell more than 2 percent on Monday. The company’s stock has fallen 15% this year, dropping its market cap to $82.16 billion.

Hershey’s shares are on pace for their best day since June 30, 2016, when the stock jumped 16% after the company publicly disclosed a $23 billion bid from Mondelez, which owns Oreo, Cadbury and Honey Maid. Increased by more than Hershey’s board unanimously Rejected the offerand Mondelez announced in August of that year that it was withdrawing from pursuing a deal.

Since its founding in 1894 by Milton Hershey, the company has remained independent, despite takeover attempts and even a strategic review by its board in 2007.

Hershey’s dual class structure gives holders of its Class B common stock, mostly held by the Hershey Trust, 10 votes for each share. As a result, Hershey Trust has “substantial control” over the company’s future, according to a research note by JPMorgan analyst Ken Goldman published Wednesday.

Pennsylvania law also gives the state’s attorney general the power to interfere with any agreement that takes away power from the trust.

That’s what happened in 2002, when Hershey Trust announced that it planned to sell its controlling interest in the company to Wrigley. After public criticism, the attorney general moved to block the sale through the Dauphin County Orphans Court, which handles legal issues related to charitable trusts, and 10 of the trust’s 17 board members left.

Consumer packaged goods companies are looking for deals to boost their sales after years of price hikes have pressured demand for their existing brands. For example, M&M owner Mars bought Pringles maker Kellanova for $36 billion this summer.