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.<br /><br />Cadbury, the target of a &pound;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 &ldquo;reviewing its options&rdquo;, while Ferrero said it was in the &ldquo;preliminary stages&rdquo; of evaluating its options. <br /><br />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&rsquo;s bid.<br /><br />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. <br /><br />Cadbury&rsquo;s share price rose just 1.2 per centyesterday, taking it to 797.5p and suggesting a lack of conviction from the markets. <br /><br />Ferrero has asked NM Rothschild&nbsp; to advise on any offer, alongside Watch Hill Partners, a boutique M&amp;A firm. <br /><br />Hershey is said to have drafted in WarrenBuffett&rsquo;s favourite banker, Byron Trott, who used to work for Goldman Sachs.