Cadbury open to offer talks
ITALIANchocolate maker Ferrero and US rival Hershey yesterday both confirmed that they were holding early talks about launching an offer for Cadbury.
Cadbury, the target of a £9.8bn hostile bid from Kraft, said it would be open to a fair offer which delivers full value. Hershey told the City that it was “reviewing its options”, while Ferrero said it was in the “preliminary stages” of evaluating its options.
Neither company confirmed that it would be launching a joint bid, but analysts believe a tie-up between the two could add up to enough financial fire-power to be a viable alternative to Kraft’s bid.
However, solo bids would be unfeasible and both firms have severe corporate governance issues to deal with. Hershey is controlled by a trust which is bound by law not to cede control and which has previously blocked deals. Ferrero is family-owned and divided over the wisdom of a major debt-financed offer.
Cadbury’s share price rose just 1.2 per centyesterday, taking it to 797.5p and suggesting a lack of conviction from the markets.
Ferrero has asked NM Rothschild to advise on any offer, alongside Watch Hill Partners, a boutique M&A firm.
Hershey is said to have drafted in WarrenBuffett’s favourite banker, Byron Trott, who used to work for Goldman Sachs.