Nestlé reviews bid options for Cadbury

LISTED SWISS company Nestlé is weighing a possible bid for chocolate maker Cadbury that would challenge Kraft Foods’ offer and a potential move by Hershey.

Nestlé is reviewing its options with bankers and may decide against a bid, sources said.

Hershey and Ferrero said in statements last week that they were also evaluating options.

Kraft’s unsolicited £10.4 billion (€11.5 billion) bid for Cadbury would create the largest maker of candy, threatening Nestlé’s and Hershey’s market positions. Any bid by Nestlé or Hershey may be countered with a higher offer from Kraft, which has never said its current proposal is final.

Nestlé may also be constrained by antitrust concerns, as a combination with Cadbury would dominate some chocolate markets.

Kraft’s bid values Cadbury at 726 pence a share, based on November 20th closing stock prices. The London-based maker of Creme Eggs and Trident gum, which closed at 801 pence, has traded above the bid price since the offer was made.

Northfield, Illinois-based Kraft, the maker of Oreo cookies and processed cheese, rose 20 cents to $27.17 on November 20th on the New York Stock Exchange.

Hershey, based in the Pennsylvania town of the same name, added 4 cents to $37.18. It has a market value of $8.47 billion, compared with Kraft’s $40.1 billion.

“We’re the only offer on the table, and we’re confident we’re the best, most logical partner for Cadbury,” Mike Mitchell, a Kraft spokesman, said yesterday. – (Bloomberg)