Vivian D. Labbe
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Vivian D. Labbe in Mergers & Acquisitions,

Is Mondelez/Pepsi A Match Made In Peltz's Heaven?

Hershey Co HSY's board of directors unanimously rejected Mondelez International Inc MDLZ's $23 billion takeover bid, but investors may still be in for some surprise M&A twists and turns in the snack food industry.

Some veteran traders now speculate Mondelez’s offer was never intended to be accepted but was rather meant to entice a buyout bid for Mondelez itself.

One of the most likely big candidates for a Mondelez buyout is PepsiCo, Inc. PEP, which has been linked to Mondelez buyout rumors for years now. Back in April 2013, activist investor Nelson Peltz said Pepsi could choose to acquire Mondelez after Peltz took positions in both companies. Although a deal never happened, both companies reportedly agreed to work closely with Peltz in the future.

Since then, Mondelez has been aggressively cutting costs and streamlining its production processes. When Bill Ackman took a $5.6 billion stake in Mondelez last year, speculation of a Mondelez buyout returned. Credit Suisse analyst Rob Moskow said there was plenty of value in Mondelez and named Pepsi as the most likely buyer. He also mentioned Kraft Heinz Co KHC as a possible buyer.

It remains to be seen whether or not Mondelez had more up its sleeve than it may have seemed with its puzzling Hershey bid. So far this year, the stock is up 0.8 percent.