Battle for Cadbury takeover intensifies

Cadbury’s rejection of Kraft’s £9.8 billion bid has sparked interest in Hershey and candy maker Ferrero who are now weighing their options. In addition, Nestlé, the Swiss food group has also emerged as a contender in this takeover battle while Kraft is mulling over raising its offer after news of counter-bids started doing the rounds.

“We’re not surprised there are rival bidders considering an offer, given the attractiveness of Cadbury’s portfolio," Erin Swanson, an analyst at Morningstar Inc. in Chicago, said Saturday. "Nestle hasn’t seemed interested in Cadbury, but from a defensive perspective, they could consider it, and anything could happen."

Companies battling for Cadbury’s acquisition
Nestlé is considering its options and is still undecided whether to make a formal offer or not to bid at all. Although the company has not planned any big acquisitions in the near future, its board is apprehensive that a combined Kraft/Cadbury combination could threaten its market share and profits.

Ferrero, the Italian family-owned company was contemplating its own joint bid with Hershey but is now unlikely to get involved.

Hershey, the US chocolate company is also working on a deal but there are doubts whether it has sufficient financial power to come up with a credible counter bid to Kraft. Hershey is believed to be in talks with the charitable trust that owns a third of its stock and 80 percent of the voting rights.

Although the trust is keen on bidding, it wants Hershey to have control of the new company after the deal is finalized. Executives of Cadbury seem a less inclined towards a merger with Hershey because of the company’s focus on confectionery.

Meanwhile Kraft Foods, the U.S. food giant at the centre of takeover struggle is waiting for its rivals to make a move before raising its own bid for the chocolate maker.

A Cadbury spokesman said, “We are focused on delivering value to shareholders as a standalone pure-play confectioner. We have always said that we would give proper consideration to any serious offer that delivers full value for the company. Unless and until we find ourselves in that situation, we have nothing to comment upon.”

Cadbury shares jump a record high
Cadbury shares raced to record high this morning as hopes of a hot bidding war for control of the U.K. chocolate maker surfaced.

Cadbury shares were up 9 pence, or 1.2 percent, at 810 pence, a new high perhaps the highest level since June 2007.