YOU ARE HERE: LAT HomeCollections

Hershey may enter Cadbury bidding

November 19, 2009|Associated Press

LONDON — Hershey Co., hoping to expand its overseas presence, has lined up a potential partner as the most recognizable name in American chocolate considers starting a bidding war for British candy maker Cadbury.

Ferrero International, an Italian candy maker, could give Pennsylvania-based Hershey the financial firepower to top a $16.4-billion hostile bid by Kraft Foods Inc.

Hershey and Ferrero said Wednesday that they were considering a possible offer for Cadbury.

"Hershey confirms that it is reviewing its options and at this stage there can be no assurance that any proposal or offer from Hershey will be forthcoming," the company said in an announcement to the London Stock Exchange. Ferrero, which makes Nutella chocolate spread and Tic Tacs, posted a similar statement.

Some analysts consider the pair a dark horse.

Frost & Sullivan analyst Christopher Shanahan said about Kraft, "The fact that they are alone and have the cash, that's why I think their bargaining power is greater, the ability to up bid is greater and their ability to pay for it is much greater than Hershey."

Cadbury said it would consider any serious offer that delivers full value for the company. That would mean more than Kraft's bid, which it dismissed as "derisory." Now that Kraft may have competition, analysts say the price for Cadbury is likely to go higher.

Northfield, Ill.-based Kraft, the world's second-largest food maker behind Swiss firm Nestle, maintained that its offer "is fair and attractive" and said it remained confident it was the most logical player.

Los Angeles Times Articles