Bloomberg is reporting that Nestle might join Hershey in making a bid for UK-based confectionery firm Cadbury, which rejected the hostile takeover made by US-based Kraft. Pushing through with a Hershey/Nestle tandem would give the former more cash to bid for Cadbury.
Nestle, the world’s biggest food company, could buy back the U.S. rights to Kit Kat and Rolo brands from Hershey, giving Hershey the power to fund a combination with Cadbury that would value the U.K. company at 840 pence a share, Nomura said.
Another option would be for Nestle to acquire Cadbury’s gum unit. Nestle bidding on its own may value Cadbury at almost 900 pence a share to gain gum and then sell the chocolate division to Hershey or Ferrero SpA, according to the Nomura analysts.
Cadbury has until January 5 to accept Kraft’s offer but only until the 18th of this month to argue against a takeover or ask for a higher price. That said, I still think Kraft-Cadbury won’t happen.
Read the rest of the entry from Bloomberg.