Town Saved As Hershey Sale Called Off

The residents of Hershey, Pennsylvania, were today celebrating a sweet victory after the charitable trust that controls Hershey Foods, the maker of the iconic chocolate bar, buckled to local opposition and called off the sale of the company.

In a last minute change of heart the trust said last night it had called off today's planned auction of America's largest confectioner, renowned for its eponymous Hershey bar. Ten of the 17 board members reportedly voted to halt the auction after a 10-hour board meeting in the Philadelphia suburb of Valley Forge.

"The trust board has rejected all the bids that it received," Hershey Trust said late yesterday. "It is asking the company to end the process of exploring the sale."

The decision scuppered what was thought to have been a done deal with Hershey Foods who were poised to accept a $12.5bn (£8.1bn) offer from the Wrigley chewing gum company. The combined company would have been called Wrigley Hershey, combining two of America's most famous sweet tooth brands.

The deal included several provisions, including a guarantee that the company's factories would be kept open, but plans for the sale announced in July unleashed a storm of protest in the central Pennsylvania town of Hershey, a community dreamed up by the 19th-century confectionery magnate Milton Hershey.

Hershey created the Hershey Chocolate company in 1894 as a subsidiary of his Lancaster Caramel firm. He later sold the caramel operation and began making chocolate in 1905 in what is now known as Hershey in the Chocolate Avenue plant that still stands today. His goal was to make a worker's utopia of good schools, free healthcare, affordable housing, theatres, parks and a zoo, built on profits from the ubiquitous chocolate bar and the conical, silver-wrapped Kisses.

Many former Hershey workers and current employees live in the town of about 13,000, still dominated by the buildings Hershey erected, including a hotel, an amusement park, botanical gardens and a theatre.

Outraged by the prospect of a sale of Hershey Foods, residents circulated petitions, staged rallies, and posted signs on front lawns to dissuade the trustees, most of whom do not live locally, from selling the company.

"I said at one point that it was the soul of this community and I for one am pleased that Hershey has taken another look at this," August Memmi, a local political leader said, after Hershey's show of people power scuppered the planned sale.

The trust had argued the need to diversify its holdings to protect the financing for its main beneficiary, the Milton Hershey school, which educates and houses nearly 1,300 students.

But Pennsylvania's attorney general, Mike Fisher, sought to block any sale in the Dauphin orphans court, which oversees charitable trust activities, arguing that court approval was needed for any deal and arguing that a sale could devastate the town.

Shares in food giant Nestle rose amid investors' relief that it will not bid for Hershey in what would have been an expensive acquisition.