NEW YORK (TheStreet) -- Shares of Hershey (HSY) - Get Hershey Company (HSY) Report are tumbling by 10.49% to $99.95 on Tuesday morning, after Oreo maker Mondelez (MDLZ) announced last night that it has abandoned it quest to acquire the chocolate maker.
The maker of Hershey Kisses and Reese's Peanut Butter Cups refused Mondelez's most recent takeover offer. The Hershey Trust, which controls the majority of Hershey's shareholder votes, is in the middle of a board overhaul amid investigations by state regulators.
It doesn't appear that Hershey is willing to make any kind of deal until the board of the trust is rearranged, Bloomberg News reporter Craig Giammona told BloombergTV's Vonnie Quinn on "Bloomberg Markets."
"The trust is this entity, this $12 billion charity that controls the company [with] 80% of the voting rights. In the past they've been a barrier to a deal. Right now there is a lot of turmoil there, the board is in flux. It kind of sounds like Hershey is saying we're not going to make a move until at least 2017, when that board gets in place," Giammona said.
Bloomberg's Mark Barton joined the conversation, asking if this confirms Hershey's reputation as "the company that can't be bought."
"It does," Giammona said. "I think people are going to look at this and remember what happened a few years back with Nestle (NSRGY), Wrigley, and Cadbury. So once again, Hershey's been an attractive company to people over the years, but there's this huge barrier dealing with the Hershey Trust."
All of the turmoil with the trust and Mondelez backing out of its pursuit gives Giammona the sense that others will be reluctant to step up and make an offer for Hershey.
"You have to believe that this would dissuade other bidders from just getting involved in what is a very cumbersome process," he said.
Hershey could be dealing with another issue as consumers tend to move away from the sugary snacks in favor of more health conscience options. Vonnie Quinn questioned if this trend would make Hershey realize it would be in its best interest to be acquired.
"You would think. I mean Hershey has taken steps to diversify their portfolio. They made a big push into beef jerky, they've tried to go more premium. You're right people are sort of buying less Hershey Bars, less Reese's Cups, trying to eat healthy," Giammona said. "That's kind of why Hersey is where they are."
Separately, 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. TheStreet Ratings has this to say about the recommendation:
We rate HERSHEY CO as a Buy with a ratings score of B. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
You can view the full analysis from the report here: HSY