Updated with additional details.
Hershey's (HSY) business may be looking too sweet to for one fellow food giant to ignore.
Shares of the iconic chocolate maker were up 15% to $111.87 in afternoon trading Thursday following a report by The Wall Street Journal that fellow candy giant Mondelez (MDLZ) has made a $23 billion bid in cash and stock, or $107 a share, for the company. Shares of Mondelez were trading up 4.8% to $45.05 on Thursday.
Hershey confirmed the bid, but the company promptly rejected it, noting that its board determined that Mondelez's expression of interest provided no basis for further discussion.
Hershey's rebuff could mean it is trying to secure a higher bid from Mondelez. According to an afternoon note by analysts at Stifel, Mondelez could bid end up bidding $120 to $130 to seal the deal for Hershey.
A Hershey spokeswoman did not immediately return a request for comment.
According to the WSJ, any acquisition of Hershey would have to be approved by the Hershey Trust, which holds 81% of the voting rights of the stock and 8.3% of outstanding shares, though Mondelez is prepared to work to win the trust's approval. But, the Hershey Trust has set a precedent of being unpredictable.
In 2002, the charitable trust that controls Hershey abandoned a $12.5 billion cash-and-stock offer from fellow candy-maker Wm. Wrigley Jr. Company in the final stages of approval.
Wrigley's offer represented a generous 42% premium over Hershey's stock price at the time, and Hershey's auction also attracted a joint bid from Nestlé and Cadbury Schweppes. Wrigley went on to be acquired by Mars for $23 billion in 2008 in a deal that was financed by legendary investor Warren Buffett. And Cadbury was acquired by Kraft Foods, which split off its confectionery business into Mondelez in 2012.