Despite ongoing opposition to the sale of Hershey, potential buyers Cadbury Schweppes and Nestlé appear to be working hard to finalise a joint bid for the US chocolate group.
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While a Pennsylvania appellate court prepares to hear arguments from both the trust that controls Hershey, and the attorney general who is opposing its sale, the frontrunners to buy Hershey continue to discuss how to proceed. According to sources close to the situation, the companies are concentrating on working out a deal that would allow Cadbury to buy some brands from Nestlé without incurring a hefty tax bill.
Cadbury is keen to buy back the brands it sold to Hershey in 1988, but is likely to want additional brands too. The UK group may even insist on buying parts of Hershey’s sales force and distribution network to ensure that the deal is worthwhile for itself, a far smaller player than mooted bidding partner Swiss giant Nestlé.
The Sunday Times newspaper put Cadbury’s part of a joint bid at £3bn (US$4.7bn), prompting shares to dip today [Monday] as investors got cold feet.
Meanwhile analysts are keeping their eye on other potential bidders. Most of the speculation has thus far focused on Nestlé and Cadbury, but Kraft is also considered to be a strong contender, with gum giant Wrigley an outsider’s tip.
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