Court move to block sale of Hershey

The sale of an American icon could be thrown into jeopardy tomorrow if a court backs an attempt by the Pennsylvania attorney general to disrupt the auction of Hershey Foods.

Mike Fisher moved to halt the sale of the chocolate maker, which has caused consternation in the company's home town of Hershey, by filing for an injunction in the Dauphin County Orphans' Court. He will argue that the community would suffer "irreparable harm" if the company were sold.

Analysts have pointed to the emotional baggage that a takeover of Hershey carries to explain the lack of what the trustees hoped would be a fierce bidding war. Nestlé, the Swiss food giant, is understood to have made a $11.5bn (£7.4bn) offer for Hershey, although it has since pointed to the regulatory pitfall its bid would carry in an attempt to talk down the price. However, Nestlé is also believed to have been exploring a possible side deal with Cadbury Schweppes, that could see the smaller UK group regain control of US licences on its products such as Crème Egg from Hershey. Kraft Foods, the owner of Toblerone and Milka chocolate, which is controlled by the tobacco giant Philip Morris, is also believed to have made an offer.

The court, which has jurisdiction because it oversees charitable trusts in Dauphin County, east Pennsylvania, will hear Mr Fisher's motion on Tuesday. His move – interpreted by cynics as a ploy to boost his chances of victory in upcoming elections for state governor – provoked a legal challenge by Hershey's controlling trustees, which put the company up for sale last month.

The Milton Hershey School, which owns 31 per cent of Hershey but controls 77 per cent of the voting rights, has until 9 September to respond to Mr Fisher's petition. The trust, which is keen to diversify its investments after the recent turbulence of stock markets, has argued that exploring a possible sale is in keeping with its fiduciary obligations.

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