Nestle stays silent on Hershey purchase claims

Swiss food giant Nestle today declined to comment on reports suggesting it is looking to snap up rival Hershey Foods in a $11.5bn (€11.86bn) deal.

USA Today reported Nestle had made a preliminary bid for the US firm.

However, spokesman Francois-Xavier Perroud said of a possible tie-up: "Nestle does not comment on market fantasies."

The Hershey Trust Co said last month it had ordered Hershey Foods executives to seek bids for its controlling stake in the sweet maker.

The trust, which owns 77% of the voting shares, is looking to diversify its assets to protect its investment.

About half of the trust’s assets are invested in Hershey 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.

In early trading in Zurich, Nestle shares were down 1.7% at 325 Swiss francs.