Hershey, Nestle, sweeten war for Cadbury

Nov 21, 2009, 21:56 GMT

Washington - Hershey and Nestle are expected to jump into the war over Cadbury sweets, media reports said Saturday, just weeks after the British-based stalwart rejected a hostile bid by US Kraft Inc.

The growing market for chocolate in the developing world has fueled interest in Cadbury, currently the dominant player of sweets in Commonwealth countries.

Hershey Co.s controlling trust wants the candy company to make a 17-billion-dollar bid for Cadbury Plc, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Nestle is also weighing a possible bid for Cadbury, according to Bloomberg financial news service, which cited two people with knowledge of the matter. Nestle was reviewing its options with bankers.

Ferrero, the Italian maker of Nutella, has also expressed interest but was unlikely to proceed with an offer, Bloomberg reported.

Earlier this month, Cadbury rejected a 9.8-billion-pound (16.4- billion-dollar) hostile takeover bid from US food company Kraft Inc, saying the bid did not come 'remotely close' to reflecting Cadbury's true value.

Roger Carr, chairman at Cadbury, said the offer involved 'the unattractive prospect of the absorption of Cadbury into a low growth conglomerate business model.'

Hershey makes and sells Cadbury brands in the US. In 2002, The 104-year-old Hershey Trust, which funds a Pennsylvania school, rejected a joint Cadbury-Nestle bid and another offer from Wm. Wrigley Jr. Co.