Hershey trust held talks with Cadbury over merger

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The charitable trust that controls the chocolate giant Hershey dramatically reopened speculation last night about a possible combination with Cadbury Schweppes, saying it was "not satisfied" about the company's performance and was examining new growth strategies.

And as investors digested the Hershey Trust's highly unusual public statement critical of the chocolate maker, it was also revealed that members of the charity's board had met Cadbury privately to examine the possibility of a deal.

People familiar with the situation said the meeting took place about a month ago, and raised the possibility of structuring a deal that would leave the trust with voting control. Although that is a structure Cadbury's shareholders are likely to see as a non-starter, news of the talks – reported by the Wall Street Journal – reveals that the Hershey Trust is continuing to explore options that many thought had been buried earlier this year.

Neither side would comment specifically on the talks last night, or on whet-her they had been followed up since. LeRoy Zimmerman, chairman of the trust, said it was committed to retaining its controlling interest in Hershey, but also "to build on its strong US position by aggressively pursuing strat-egies for domestic and international growth".

The company is one-third owned but majority controlled by the trust, set up by Milton Hershey in 1905 to educate orphans. Mr Zimmerman's statement contained harsh words on Hershey's under-par performance since 2005.

Todd Stitzer, chief executive of Cadbury Schwep-pes, said this year that a merger of its chocolate business with Hershey would make strategic sense.