Bidding war for Cadbury in prospect
Wednesday November 18 2009
A bidding war for Dairy Milk maker Cadbury is in prospect after confectioners Hershey and Ferrero said they were considering their options over the firm.
Hershey said there was "no assurance" over a definite offer, but has been linked with a joint bid in tandem with Italian confectioner Ferrero.
Ferrero also confirmed it was "in the preliminary stages of evaluating its options in respect of Cadbury".
A possible counter bid would be a blow to Oreos and Toblerone maker Kraft, which went hostile with a £9.8 billion offer for Cadbury last week.
Hershey already has a business relationship with Cadbury, holding a licence to make Dairy Milk bars and Cadbury Creme Eggs in the US.
Cadbury shares rose more than 1% after the two firms confirmed their potential interest.
The intervention will put pressure on Kraft - also behind Kenco coffee and Dairylea cheese - to improve its offer for the business.
Kraft appealed directly to Cadbury's investors after its initial approach was rejected by the board in September.
But it refused to improve the terms of its cash-and-shares proposal, which is lower than two months ago due to falls in the Kraft share price.
Cadbury has labelled the Kraft bid "derisory" and said it did not come "remotely close" to reflecting the value of the company. Kraft said last week that its merger plans offered "the best immediate and long-term value" for Cadbury - and played up the fact that no other business had publicly signalled an interest in the firm.
Press Association
