Mondelez International, whose snacks also run from Nabisco to Cadbury chocolate, has made a $23 billion takeover offer for Hershey in what would be one of the biggest deals of the year.
Hersey said on Thursday that Mondelez had offered to pay $107 a share in cash and stock — a premium of about 10 percent to Hershey's closing stock price. Hershey said that its board had "rejected the indication of interest and determined that it provided no basis for further discussion between Mondelez and the company."
If the two companies strike a deal, it would be among the most prominent in a year that has been lacking in daring deal-making.
Buying Hershey would be the boldest transaction for Mondelez — cleaved from what was once Kraft — since its former parent bought Cadbury of Britain in a $19 billion deal more than six years ago.
But winning Hershey could prove tricky for Mondelez, since the smaller chocolate maker is effectively controlled by a charitable trust that owns about 81 percent of the company's voting power.
The Hershey Trust, established by Milton Hershey and his wife, Catherine, in 1905, has opposed takeovers of the company in the past. In 2002, the trust halted an auction of the company at the 11th hour as it was about to accept a $12.5 billion deal from Wm. Wrigley Jr. Company.
News of the approach, which was reported earlier by The Wall Street Journal, sent shares in Hershey up 15 percent in trading on Thursday, to $111.87. Shares in Mondelez rose 4 percent, to $44.71.