Kraft weighs higher Cadbury bid if rival takeover offers emerge

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Philadelphia: Kraft Foods Inc may raise its offer for British chocolatier Cadbury Plc or offer more cash in its bid if rival takeover offers emerge, a source familiar with the situation said on Sunday.

Kraft took a $16.8 billion hostile offer for Cadbury to shareholders two weeks ago. Most of the remaining large players in the global confectionery industry—US-based Hershey Co, Italy’s Ferrero and Switzerland’s Nestle—are now weighing takeover bids themselves, according to Reuters sources and media reports.

Kraft could keep its bid unchanged if no rival bidders emerged, however, a source said. Kraft “made an offer to start the process,” the source said, who declined to be named because they were not authorised to speak with the media. Kraft “never said that was its final offer,” said the source. Kraft could not be immediately reached for comment.

Cadbury, which has slammed Kraft’s existing offer as “derisory,” has recently attracted greater takeover interest as rivals contemplate how the industry will be reshaped if the maker of Dairy Milk chocolates is acquired. Cadbury is the world’s second largest confectioner, but would vault to the top spot in a combination with Kraft, ahead of Mars-Wrigley. Nestle was still weighing its options and could decide against a bid, Bloomberg said, citing two unnamed people with knowledge of the matter.

Ferrero and Hershey said on Wednesday they were reviewing a possible offer for Cadbury, while sources familiar with the matter said they were considering a joint bid. Hershey also is weighing a solo $17 billion offer, a source said on Friday.

Italian newspaper Il Sole 24 Ore reported that Hershey executives will meet with Ferrero officials in Italy in the coming days. Nestle declined to comment on Sunday. Ferrero and Hershey could not be immediately reached. Cadbury maintains it is worth more than the Kraft cash and stock offer that valued the company just shy of 718 pence based on Friday’s price. Cadbury investors have said they would not contemplate an offer below 800 pence, with 820 pence considered a potential deal-closer.

“We’re focused on delivering value to shareholders as a stand-alone, pure-play confectioner,” Cadbury said in a statement. “However, we’ve always said we’d give proper consideration to any serious offer that delivers full value for the company. Unless and until we find ourselves in that situation, we have nothing to comment on.”