Bloomberg News

Hershey Said to Consider Ex-Cadbury CEO Stitzer for Board

June 08, 2011

(Updates share price in 11th paragraph.)

June 8 (Bloomberg) -- Hershey Co., the maker of Kisses and Reese’s Peanut Butter Cups, has held talks with former Cadbury Plc Chief Executive Officer Todd Stitzer about taking a seat on the board, according to people with knowledge of the matter.

Interim chief John Bilbrey is the frontrunner for the CEO position, though Stitzer also is being considered for the role, said three people, who declined to be identified because the matter is private. Hershey plans to name a permanent head before the end of June, the people said. The board and the executive committee handling the CEO search have meetings scheduled next week, one person said.

“Getting an individual like Stitzer at the helm could be a plus, given his extensive experience at Cadbury,” said Erin Lash, an analyst with Morningstar Inc. in Chicago. The executive’s experience may be particularly useful as Hershey expands beyond the U.S., which accounts for the bulk of its sales, she said.

Chairman James Nevels first spoke with Stitzer about joining Hershey’s board several months ago, one of the people said. One possibility would be for Stitzer to join the Hershey board and mentor Bilbrey, said the person. Bilbrey, who has been at the Pennsylvania-based company for eight years, stepped in after David West left last month to head Del Monte Foods Co.

“The board is committed to conducting an effective, expeditious and confidential search, the result of which will be shared in due course,” Hershey’s board said in an e-mailed statement. “It is not working within a specific timeframe.”

Cadbury Time

Hershey’s effort to lure Stitzer has continued in recent weeks, said the people. The executive, who spent almost three decades at Cadbury, left in 2010 after Kraft Foods Inc. bought the company for more than $20 billion. Stitzer previously talked with Hershey about a possible acquisition of Cadbury as a way to fend off Kraft, people said at the time.

Since leaving Cadbury, Stitzer, 59, has taken a role on the advisory board of Hamlin Capital Management LLC, a New York- based investment advisory firm catering to high net-worth individuals and institutions, according to its website. At Cadbury, he oversaw more than 40 transactions, including the $4.2 billion purchase of chewing-gum maker Adams Inc. in 2003.

Stitzer didn’t return messages left at Hamlin Capital. Kirk Saville, a Hershey spokesman, declined to comment.

The new chief will oversee Hershey’s push into developing countries such as China, part of efforts to fuel growth beyond its U.S. home turf. Bilbrey, promoted to Hershey operations chief last year, was elevated to interim CEO upon West’s exit, and directors said they would act quickly to name a permanent successor.

Bilbrey

“We’re pleased that J.P. has accepted this position,” Nevels said then. “The board has seen firsthand his leadership and expertise and unanimously made this appointment.”

Hershey shares rose 45 cents to $54.61 at 4 p.m. in New York Stock Exchange composite trading. They have gained 16 percent this year.

Bilbrey, 54, helped establish Hershey brands outside the U.S. in various international roles before working on a turnaround of the company’s North American operations starting in 2007. He also spent 22 years at Procter & Gamble Co.

Finding the right person for the CEO job may be difficult since Hershey is controlled by an outside trust, said Morningstar’s Lash. The Hershey Trust has 80 percent of the company’s voting power and appoints the majority of its directors.

Members of the trust clashed with West last year when he resisted their entreaties to counter Kraft’s bid for Cadbury, people familiar with the matter said at the time. Under West, Hershey generated a 7 percent sales gain in 2010. Annual per- share net income may triple this year from his first year on the job, according to estimates compiled by Bloomberg.

“Hershey has been making strides -- generating accelerating sales growth and margin improvement,” Lash said. “Any disruptions that may result from this management transition could be a road bump.”

--Editors: Julie Alnwick, Jennifer Sondag

To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Duane Stanford in Atlanta at dstanford2@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editors responsible for this story: Jennifer Sondag at jsondag@bloomberg.net; Robin Ajello at rajello@bloomberg.net


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