London, Nov 23 (PRINTWORDS NEWS) UK based legendary confectionery company Cadbury’s share value went up by several notches recently as the news spread that the confectionary maker may get more bidders on its way. Earlier Cadbury turned down a hostile takeover bid from rival Kraft Foods saying its offer was not satisfactory. Kraft offered a takeover deal worth $16.4 billion but it was a mix of share and cash. Until a few days back, there was no other bidder in the scenario. However, with the prospect of some of the big confectionary companies vying for Cadbury, its shares took an upward jump.
The record jump in Cadbury’s share took place after Bloomberg reported that Nestle, the Swiss food giant may enter the takeover race soon. It was also said earlier that Italian chocolate manufacturer Ferrero may enter the race for Cadbury. However, the company has not come up with a public statement as yet. The Cadbury chairman, Roger Carr wants Hershey to become Cadbury’s merger partner rather than the owner. However, he has made it clear that both Hershey and Kraft may end up losing the opportunity if they do not come up with a suitable bid soon. He expressed his view in an interview given to The Sunday Telegraph. He also said that Cadbury is keener on the value of an takeover or merger offer compared to its source.
Hershey had offered Cadbury a deal worth $17 billion and it had more cash in it compared to the bid offered by Kraft. Switzerland based Nestle is likely to join the Cadbury acquisition battle as the market buzz says. The company is examining its finance options with the bankers and a formal offer is yet to come from its side. On Monday, Cadbury shares rose to 813 pence. It was way over the 724 pence per share offer of Kraft. However, it would be too early to count Kraft out of the competition. According to a report obtained from Reuters, Kraft may reconsider its bid and come up with a better offer for Cadbury. If Nestle finally joins the takeover race Kraft has every possibility of increasing its bid.
Nestle needs to decide how it would fit Cadbury brands in its portfolio of health and wellness foods if it acquires Cadbury. Some industry insiders are speculating that Nestle can sell out its share in eye care entity Alcon to Novartis. This would infuse the Swiss food maker with a whopping amount of cash.
Initially, Nestle was thought to be out of the bid. However, the Nestle management might have changed track considering the Kraft Cadbury union will result in the creation of the biggest candy maker. It would threaten the position and market share of the Swiss food giant. However, A Kraft spokesperson said that the company is very much in the competition. As of now, it is the only formal bidder for Cadbury and feels that there is no other contender that can be more suitable for the UK based chocolate maker.
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