Ferrero won't spoil Cadbury deal with counter bid
Published 26/01/2010 | 05:00
Ferrero International, the Italian chocolate group that makes Ferrero Rocher, Nutella and Kinder eggs, has ruled itself out of counter-bidding for Cadbury, leaving Kraft's agreed £11.9bn bid unchallenged.
The company first said that it was considering making an offer on November 18.
Last week, Hershey, the American chocolate group, ruled itself out of bidding. It was unlikely that Ferrero would make an offer without Hershey's help because it would have to borrow heavily to raise the firepower to match Kraft's offer.
Individually, neither it nor Hershey has the financial resources to buy the whole company or have publicly listed shares to offer as a currency.
Michele Ferrero, head of the Ferrero family, is said to have been lukewarm about bidding for Cadbury because he wanted to keep the business independent rather than involve other investors. It was his sons, Pietro and Giovanni, managing directors of the business, who were thought to be eager to do a deal.
Ferrero said that it reserved the right to return with an offer if there were a material change in circumstances, if Kraft withdrew its bid, or if Cadbury agreed to an offer from other bidders, including Hershey.
Meanwhile, Kraft is said to be preparing to launch a £7bn bond issue to refinance a short-term bridging loan from investment banks for its Cadbury bid.
Kraft also warned yesterday that Cadbury shareholders who choose to receive all the value of their shares in cash will only receive 799p per share. Those who opt for the minimum of cash -- 500p and 0.1874 Kraft shares per Cadbury share -- will receive 827p, it said.