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'Talks on rival bid' for Cadbury Ferrero in possible Cadbury bid
(29 minutes later)
Two international confectionery firms are considering a joint bid for Cadbury that could forestall a hostile takeover by Kraft Foods, reports say. Italian confectionery group Ferrero has confirmed it is "evaluating" a possible takeover offer for the UK's Cadbury.
US-based Hershey and the Italian firm Ferrero are reported to have held preliminary talks on the plan. Ferrero said it was in the "preliminary stages" of looking at its options.
Cadbury has declined to comment. Earlier this month it rejected Kraft's proposed offer worth £9.8bn. Its comments follow reports Ferrero may team up with US chocolate group Hershey to bid for Cadbury, a move that could forestall a hostile bid by Kraft Foods.
The Wall Street Journal says Hershey has spoken to banks about financing for a takeover of Birmingham-based Cadbury. Cadbury has declined to comment on the speculation of a joint Ferrero and Hershey bid. Earlier this month, it rejected US group Kraft's £9.8bn offer.
Earlier, Italian business daily Il Sole 24 Ore said family-owned Ferrero, which makes Nutella chocolate spread and Ferrero Rocher chocolates, could join financial investors and private equity players for a possible Cadbury bid. Ferrero did not mention Hershey in its statement.
Confectionery giantConfectionery giant
Analysts agreed that it was unlikely that either Hershey or Ferrero could fund a takeover of Cadbury on their own. Analysts agreed that it was unlikely that either Hershey or Ferrero - which makes Ferrero Rocher chocolates - could fund a takeover of Cadbury on their own.
CADBURY John Cadbury, a Quaker, opened shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming 10 years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008Employs about 45,000 people in 60 countries Check Cadbury's share priceCADBURY John Cadbury, a Quaker, opened shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming 10 years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008Employs about 45,000 people in 60 countries Check Cadbury's share price
"It doesn't appear that either Ferrero or Hershey is in the financial position of taking on Cadbury all by themselves," said Erin Swanson, an equity analyst with Morningstar."It doesn't appear that either Ferrero or Hershey is in the financial position of taking on Cadbury all by themselves," said Erin Swanson, an equity analyst with Morningstar.
Other commentators have speculated that Cadbury may prefer to join with Hershey and Ferrero, as both are also predominantly confectionery companies, unlike Kraft which has a much wider food offering.Other commentators have speculated that Cadbury may prefer to join with Hershey and Ferrero, as both are also predominantly confectionery companies, unlike Kraft which has a much wider food offering.
Cadbury is the world's second-largest confectionery business, with full-year revenues of £5.4bn in 2008. It described Kraft's hostile offer as "derisory".Cadbury is the world's second-largest confectionery business, with full-year revenues of £5.4bn in 2008. It described Kraft's hostile offer as "derisory".
Shares in Cadbury were up 1% or 8.5 pence to 796.50p in late morning trading. Shares in Cadbury were up 1.3% or 10.5 pence to 798.5p in early afternoon trading.