It is now urging Hershey's chief executive, David West, to make a competing offer to the $16.5 billion bid Kraft made earlier this month for Cadbury, people familiar with the matter say. A bid, if one emerges, wouldn't be ready for at least two weeks, and the potential terms remain in flux.

One possible scenario, said these people, would include at least $10 billion in cash from Hershey, plus $2 billion in new Hershey shares. A third component of this package would be an additional $3 billion to $5 billion in cash from rich investors in exchange for equity in Hershey, these people said. The investors are being courted by Hershey adviser Byron Trott, a former Goldman Sachs banker known for his close relationships with Warren Buffett and other rich investors.

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Mr. Hershey was considered as much a philanthropist as an entrepreneur. He held the view that businesses and their leaders were morally obligated to share their wealth with society. So as he built the chocolate company he raised a town as well -- erecting a bank, a department store, churches, golf courses, a zoo and a trolley system.

In 1909, he and his wife, Catherine, founded a school for orphan boys, now called the Milton Hershey School. He later transferred his wealth, including his company ownership, to Hershey Trust Co., which administers the school's trust.