The latest battle in the chocolate wars is over -- at least for now. Cadbury shareholders accepted Kraft's increased bid to buy the British chocolate company. Hershey's issued a statement today saying it will not be making a bid as a result of the Cadbury shareholder vote. Bloomberg reports:
Hershey Co. abandoned a plan to bid for Cadbury Plc after the U.K. confectioner accepted Kraft Foods Inc.'s 11.9 billion-pound ($19.2 billion) offer.
Hershey doesn't intend to make an offer, the company, based in the Pennsylvania town of the same name, said in a statement today. The decision not to consider an offer was made at a Jan. 20 board meeting, according to people familiar with the matter.
Kraft said Jan. 19 that its cash-and-stock offer for Cadbury won the U.K. candy company’s approval, after Hershey's board had spent months debating whether to bid and on what terms. U.K. takeover regulators gave Hershey until Jan. 25 to announce a bid or back out.
"It was always going to be a long shot for Hershey to get all their ducks in a row for a bid, and even if they put one together, they were up against a much larger suitor in Kraft," B. Craig Hutson, a corporate bond analyst for Gimme Credit in Chicago, said yesterday.
Warren Buffett, a big shareholder in Kraft through his company Berkshire Hathaway, is unhappy with Kraft's bid. He said Kraft is overpaying. But Cadbury had fought off Kraft's hostile bid because it said the price was too low and that it didn't want to be owned by a giant food conglomerate.
But now Cadbury will be owned by Kraft; chocolate lovers everywhere are hoping that Kraft doesn't change the recipes or the manufacturing process.
