More Squawk from Jim Cramer: Mondelez Offer for Hershey (HSY) ‘Way Too Low’
Bloomberg News
NEW YORK (TheStreet) -- Shares of Hershey (HSY) - Get Reportare down 1.74% to $111.51 on Friday afternoon after the chocolate giant rejected a $23 billion takeover offer from snack food company Mondelez (MDLZ) yesterday.
The offer is "way too low," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning, adding that "if Hershey wants to sell it's gotta be much higher."
"I love Hershey. I remember when they first decided to be more than just chocolate and they started buying some other brands and then they moved their factories to less expensive places so that the gross margins went up," Cramer noted.
"It's been a winner and it's worth more than it's selling for substantially," Cramer said of Hershey.
Cramer also said that he likes Mondelez much more than he did a year ago and that the company is "getting better."
But the idea of a bid like the one that came out for Hershey was "fanciful," according to Cramer. To him, the offer said that Mondelez wanted to do some kind of transaction.
Cramer said in the above video that Hershey is a "brilliant" acquisition, but an offer would have to be between $130 and $140 per share.
Additionally, Cramer mentioned that Kraft Heinz Foods (HNZ) needs a deal because the company has "no growth."
He also noted that older brands such as General Mills (GM) need to continue to "move like sharks" to stay alive as Millennials do not have the same food habits as older generations.
Shares of Mondelez are declining 0.77% to $45.16 on Friday afternoon.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on Hershey stock.
The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, notable return on equity and solid stock price performance.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HSY