Chocolate Wars: Now Nestle Wants to Bid For Cadbury
When Hershey's threw its hat into the ring of potential purchasers for Cadbury, Cadbury share prices started rising. Now reports say that Nestle is interested in bidding for Cadbury, as well. In response, Kraft foods is said to be willing to raise its offer for the British chocolate company.
Kraft, led by Chief Executive Officer Irene Rosenfeld, made an unsolicited 10.3 billion-pound ($17 billion) approach for Cadbury two months ago. The world's second-largest food company may increase that offer if rival bidders emerge, Reuters said late yesterday, citing a person it didn't identify.
Hershey's controlling trust wants the company to make a $17 billion offer, the Wall Street Journal reported Nov. 20. Nestle is reviewing its options with bankers and may decide against a bid, said two people with knowledge of the matter, who asked not to be identified because the talks are private.
"Every confectionery company of any decent size is going to be looking at this because it's a one-off opportunity," said James Amoroso, a food industry consultant in Walchwil, Switzerland. "They'd be stupid not to examine it."
Cadbury shareholders are quite happy that the bidding war is starting to heat up. The shareholders were unhappy with Kraft's lowball offer for the maker of Cadbury milk and other popular chocolate items. We hope that whoever buys the company keeps the same manufacturing plants so that the quality stays the same.
