Hopes of rival Cadbury offer melting away

Steve Dinneen
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CADBURY remained defiant last night in the face of a hostile takeover bid by Kraft, as hopes of a rival offer appeared to fade.

Hershey emerged as a potential rival to Kraft after its board authorised a bid for the chocolatier.

“In recent times they have reaffirmed their interest,” Cadbury chairman Roger Carr said yesterday, but acknowledged there was “no formal bid and may not be.”

The possibility of a bid seemed increasingly unlikely as Hershey faced up to the mammoth task of raising the capital to bid for a company twice its size.

The US-based chocolate maker has just nine days to come up with a formal offer, which will make it difficult to find partners to finance the bid.

Hershey would need to top Kraft’s $17.1bn (£10.5bn) hostile bid and the Illinois-based company still has a chance to better any counter-offer. Another major stopping point is a share issue that would dilute the controlling Hershey Trust.

Cadbury yesterday published more detailed 2009 results than those disclosed in its defence document earlier this week. Reiterating its rejection of Kraft’s offer, Cadbury said sales in emerging markets grew at nine per cent last year compared with two per cent growth in developed economies, such as the US and UK.

Kraft has until 19 January to sweeten its bid, while Hershey has until 23 January.