Hershey (HSY) May Team With Ferrero For Joint Cadbury (CBY) Bid
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Hershey Co. (NYSE: HSY) is currently in serious talks with Italian chocolate maker Ferrero Spa to team up with a joint bid for Cadbury PLC (NYSE: CBY), according to a report in the Wall Street Journal on Tuesday.
The deal by the U.S. chocolate giant and Ferrero would rival the previous $16.7 billion bid made by Kraft Food (NYSE: KFT) last week to purchase the British confectionary company that was rejected.
To this point there has been no official offer made by the boards of the two companies and it is not clear at this point if there in fact will be one made. The talks have been going on for several weeks with executives from Hershey being the aggressors in getting a bid worked out.
The main obstacle during the talks is which company will get to take hold of Cadbury's higher margin gum and candy business.
Ferrero is best known for making Tic Tacs and Nutella chocolate spread. The company is a privately-held company that had $8.9 billion in sales last year.
Hersey had previously moved away from being a serious contender for the purchase of Cadbury, as it is without the financial capacity to top Kraft's top offer. However the preliminary talks between Hershey and Ferrero are the first indication that a competitive bid for Cadbury could emerge.
Shares for Hershey are down slightly in aftermarket movement by 0.16 percent to $38.35. Kraft shares closed at $27.63 and have stayed flat in aftermarket trading. Cadbury plc is up 0.28 percent.
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