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A foreign takeover of Cadbury looked all but certain tonight after US giant Hershey and Italy's Ferrero confirmed they are considering bids to counter the low-ball offer from Kraft.
Cadbury shares raced towards a record high, up 14½p to 802½p at one stage, as excitement grew over a bidding war for the Dairy Milk and Creme Egg maker.
Hershey, the world's fifth-biggest sweetmaker, said in a statement it was “reviewing its options” over an offer for Cadbury.
Ferrero, the Italian maker of the famous Rocher brand, released a statement minutes later saying it was “evaluating” a similar move.
The timing and wording of the two statements fuelled speculation that the pair are lining up a joint bid for Cadbury. It came just a week after Kraft launched a hostile £10 billion bid for Cadbury as the biggest takeover battle of the year heated up.
Cadbury immediately rejected the offer from Kraft, dismissing it as “derisory” and insisting that Cadbury is “an exceptional standalone business”. The move from Hershey and Ferrero put pressure on Kraft to raise its bid to well over 800p towards 850p, or even higher, to have any chance of success. However, analysts raised doubts over whether Hershey or Ferrero could raise the funds needed to secure a deal with Cadbury.
Kraft, the maker of Oreo cookies and Philadelphia cheese, pointed out that its own bid, a mixture of cash and shares, is the only one around.
A Kraft spokesman said: “Our offer is fair and attractive. We remain confident we're the best, most logical partner.”
Hershey has long been considered an ideal partner for Cadbury but analysts assumed it lacked the necessary firepower to launch a credible deal.
But according to the Wall Street Journal, it has approached bankers with a view to raising finance for a bid, perhaps in concert with Ferrero.
Hershey chief executive David West has talked to JPMorgan and Bank of America about raising cash for a tilt at Cadbury and to the Italian outfit.
Reader views (2)
there is no national interest in xenophobic "little britain" ideas as expressed above.
- Scotty, London, 18/11/2009 16:04
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Another iconic British company appears to be up for grabs with a number of hounds on the scent. Surely it is time for the government to step in and prevent any takeover of the company which may be against the national interest. There are growing number of American companies that have acquired British companies only to transfer production overseas or the companies fail because of a welter of debt. Cadbury's is too big and important for that.
- Robin Brittain, Wolverhampton UK, 18/11/2009 09:22
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