Shares in chocolate maker Cadbury picked up 1.2% yesterday after further news emerged about the intentions of potential bidders Ferrero and Hershey, writes Tim Sharp.
An Italian newspaper reported that family-owned Ferrero is keen on Cadbury’s sweets and gum
business, while Hershey would take the chocolate. It added that Ferrero has about €2 billion (£1.8m) in cash that could be used in a deal.
Financing from big Italian banks could account for half of the money. Ferrero would like to take on little debt in a possible takeover, Il Sole
24 Ore said.
It is thought that Ferrero, the company behind Nutella chocolate spread, is wary of attempting a bid without a green light from the board of Dairy Milk maker Cadbury.
A hostile bid worth £9.8bn has already been launched by American food giant Kraft, which makes Toblerone and Diarylea.
Bank financing would pay for about half of Ferrero’s bid. Newswire Dow Jones said yesterday that Ferrero and US-based Hershey are still deciding whether to bid for all of Cadbury or only a large stake.
Chocolate comprises 45% of Cadbury’s sales, its Trident gum operation 33% and other sweets the rest. But high margins on chewing gum means it accounts for as much as 45% of the company’s value.
Cadbury’s shares closed up 9.5p at 800.5p despite a falling market.
