Tootsie Roll Industries Inc. Chairman and Chief Executive Officer Melvin Gordon died Tuesday in Boston at the age of 95 after a brief illness. His wife, Ellen Gordon, will take over his positions.
Ellen Gordon, the company’s president and chief operating officer, was appointed to the jobs as part of an existing succession plan, Chicago-based Tootsie Roll said Wednesday in a statement.
The news sent the shares up 7.1 percent as investors speculated that the transition will lead to a buyout of the candy company. Ellen Gordon, who is in her 80s, is seen as more likely to pursue a deal following the death of her husband, said Elliott Schlang, managing director at Great Lakes Review in Cleveland, which covered the company from 1985 to 2011. Tootsie Roll’s market value is about $2 billion, and the couple owned a controlling stake.
“People have felt for some time that the company was a good sellout candidate,” he said. “It’s unusual with a company of this size to have the shares in one hand basically.”
The shares climbed to $32.99 in New York, the biggest one-day gain since Oct. 28, 2008. The stock declined 3 percent last year.
Melvin and Ellen Gordon were married for 65 years and had four daughters.
“Melvin’s life represented the very highest values in business, wisdom, generosity and integrity,” the company said in the statement. “Tootsie Roll has seen great growth and success during his time as chairman. Melvin’s dedication to Tootsie Roll for over fifty years as board chair, his creativity and determination were an inspiration to us all.”
Tootsie Roll has a four-person board, which includes Lana Jane Lewis-Brent, 67; Richard Bergeman, 76, and Barre Seibert, 72, in addition to Ellen Gordon, according to data compiled by Bloomberg. Ellen Gordon was listed as 82 years old in the company’s Feb. 28 10-K filing. Tootsie Roll has an average board age of 78, third-highest in the Russell 2000 Index, according to data compiled by Bloomberg.
The Gordons controlled the company through Class B stock that has 10 votes a share. They also owned about 49 percent of the common shares.
Along with its namesake chocolate chews, Tootsie Roll sells candy under the Blow Pop, Dots, Junior Mints, Charleston Chews and Dubble Bubble brands.