Sweet nothing yet

14 January 2010 By Chris Hughes

The obstacles to the U.S. food group bidding for Cadbury board unity, financial firepower may be falling. But any offer would still involve heaps of stock. With synergies lower than in a Kraft deal, Cadbury shareholders would want a huge share of the enlarged entity.

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Hershey is preparing a counterbid to Kraft Foods' hostile 10.4 billion pounds offer for Cadbury, the Financial Times reported on Jan. 14 citing people familiar with the matter.

The Hershey Trust, which controls the U.S. food group, would provide $1.25 billion of equity to support an offer for the UK confectioner, the FT said. The Hershey board had hired Byron Trott, a former Goldman Sachs banker close to Warren Buffett, to source additional equity finance for a deal from wealthy investors, the newspaper added.

Hershey shares fell in midmorning trading in New York on Jan. 13 after the flyonthewall.com website said the Associated Press had reported the group's interest in making a solo bid for Cadbury.

The UK group is due to provide a final update on its defence against Kraft's hostile offer on Jan. 14.

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