Report: UK's Cadbury won't bite on Hershey offer

AP News
Posted: Nov 22, 2009 11:06 AM

British candy company Cadbury PLC will reject an expected 10.3 billion pound ($17 billion) takeover bid from U.S. confectionary giant Hershey Co., a newspaper reported Sunday.

Britain's Sunday Times cited an unnamed industry source as saying Cadbury is reluctant to do a deal unless Hershey raises its valuation of the company, which makes the Dairy Milk chocolate bar.

The Wall Street Journal reported Friday that Hershey Co. is preparing a bid, but that it won't be ready for around two weeks. It said the offer is expected to include at least $10 billion in cash from Hershey, plus $2 billion in new Hershey shares and another $3 billion to $5 billion in cash from investors in exchange for equity in Hershey.

That bid would top a recent $16.5 billion hostile offer by Kraft Foods Inc. for the British confectioner.

Both Kraft and Hershey are seeking access to Cadbury's presence in developing markets, including in Mexico and India. About 250 million bars of the company's famous Dairy Milk are sold every year in 33 countries.

Cadbury on Sunday declined to comment on the speculation.

"We have always said that we would give proper consideration to any serious offer that delivers full value for the company," the company said in a statement. "Unless and until we find ourselves in that situation we have nothing to comment upon."