HERSHEY, Penn. (
CEO David West left the confections maker to run
Del Monte Foods
, according to reports, sending the stock lower in Wednesday's session.
Operations chief John Bilbrey will replace West temporarily, and the board said it will "move quickly" to find a permanent CEO.
Investors were jittery about the executive shuffle, bidding Hershey shares 2.8% lower to close at $55.48 in Wednesday's trading session amid heavy volume. More than 4.2 million shares changed hands, compared with their average daily volume of 1.2 million.
Citi analyst David Driscoll noted that West's exit from Hershey's masthead could make the company a prime
takeover target, though he estimated the probability of a sale is only around 10%, up from his estimation of 2%.
or Kraft as likely bidders who may view Hershey's executive changeup as "a good opportunity" to buy.
Deutsche Bank analyst Eric Katzman noted that executive changes come at an uncertain time for Hershey as the company faces soaring commodity prices for cocoa, sugar and milk -- headwinds that led it to cut costs.
West helped improve sales growth at Hershey since he took over the company in 2007, but has since butted heads with the company's controlling trust, opposing entreaties to counter
successful acquisition of
"This is a significant negative development for Hershey," Katzman said. "It will be difficult for Hershey to recruit as capable a CEO near- to intermediate-term."
Wells Fargo analyst Eric Serotta noted that "Hershey is still well-positioned to deliver better-than-expected sales and earnings growth over the next few years, driven by strong momentum from its core brands, new products, productivity savings and international growth."
In late April
Hershey posted a better-than-expected adjusted quarterly profit of 72 cents per share.
Sales jumped 11% to $1.56 billion, also topping expectations.
-- Written by Miriam Marcus Reimer in New York.
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