Sweet Deal: Nestle Eyeing Hershey?

Swiss food and beverage giant Nestle is offering about $11.5 billion for the biggest U.S. candymaker, Hershey Foods, USA Today reported in Monday's editions.

But Nestle, whose brands include Crunch candy bars, Taster's Choice coffee and Perrier water, declined to comment on the report.

"Nestle does not comment on market fantasies," said spokesman Francois-Xavier Perroud.

Spokesmen for the Hershey Trust co. and the candymaker declined to comment on the report. The trust has hired investment bank Morgan Stanley to advise them in the process, while Hershey Foods has hired UBS Warburg.

USA Today, citing unidentified people familiar with the deal, said Nestle had made a preliminary bid of $82 to $85 per share for the Pennsylvania-based company, which closed Friday at $75.03 on the New York Stock Exchange.

The trust announced last month that it had ordered Hershey Foods executives to seek bids on its controlling stake in the candymaker.

The trust, which owns 77 percent of the voting shares, said it was looking to diversify its assets to protect its investment. About half of the trust's assets are invested in the candymaker's stock and board members say the trust — which benefits the 93-year-old Milton Hershey School for disadvantaged children — could be hurt if the company's finances falter.

Nestle, Kraft Foods and Cadbury Schweppes are seen as possible buyers.

The newspaper report said a final decision is expected within weeks.

The proposed sale of control of Hershey has run into intense resistance in Pennsylvania where the company is based in a town that bears its name.

On Friday, Pennsylvania Attorney General Mike Fisher asked a state court to issue a restraining order against a possible sale of Hershey Foods, saying the deal could harm the community.

"We think it's time to put a halt to this sale," Fisher said in a statement. "We are concerned about the speed in which the Hershey Trust seems to be moving forward with their plans."

Despite the criticism, Hershey Trust president and chief executive Robert C. Vowler has said that the trustees' intention to explore a sale has not wavered.