23rd Nov 09
Cadbury not likely to accept Hershey takeover offer
by Harry Oldfield
It was reported yesterday that confectionary giant Cadbury is expected to rejected an expected £10.3 billion takeover bid from US candy giant Hershey.
A newspaper article cited an unnamed industry source as saying that Cadbury was reluctant to make a deal with unless Hershey raised its valuation of the company, which produces the Dairy Milk chocolate bar.
It was also reported last week the Hershey has been preparing a bit, but it won’t be ready for about two weeks. It has said that the offer is expected to include at least $10 billion in cash from Hershey, $2 billion in new Hershey shares, and another $3 to $5 billion in cash from investors in exchange for equity in Hershey.
The bit would beat a recent $16.5 billion hostile offer from Kraft Foods, for the British chocolate manufacturer.
Both Hershey and Kraft have been seeking access to Cadbury’s presence in developing markets, including Mexico and India. Approximately 250 million bars of the famous Dairy Milk chocolate are sold each year in 33 countries around the world.
A statement from Cadbury’s said that the company would always give proper consideration to any serious offer that delivers full value to the company; unless and until the company finds themselves in that situation, they have nothing to comment upon.
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