Terms must be right before Cadbury gives up independence

Published on Sunday 22 November 2009 21:03

CADBURY last night reiterated its desire to remain an independent chocolate maker unless the price was right after reports that the Dairy Milk manufacturer would reject a £10 billion offer from US giant Hershey.

The Bournville-based chocolatier, which has already described a hostile 9.8bn offer from Kraft as "derisory", is thought to be adamant that there would be no deal unless a much higher bid is tabled.

Hershey, which is controlled by a charitable trust in Pennsylvania, is understood to be at an advanced stage of drawing up an offer. This is thought to comprise $10bn (6bn) in cash, 2bn in new Hershey shares and some $3 to $5 billion from investors. But Cadbury is still adamant it wants to stay independent unless the price is right.

A spokeswoman last night said: "We're focused on delivering value to shareholders as a standalone pure-play confectioner. However, we have always said that we would give proper consideration to any serious offer that delivers full value for the company. Unless and until we find ourselves in that situation we have nothing to comment upon."

There has been speculation that Hershey would team up with Italian confectioner Ferrero to mount an offer.

But a report in the Wall Street Journal this weekend suggested that Hershey had decided to go it alone in its bid for Cadbury.

Meanwhile, nationalised lender Royal Bank of Scotland has attracted the ire of MPs after backing the Kraft offer. Liberal Democrat treasury spokesman Vince Cable said RBS should not be supporting a foreign company's attempts to take over a UK business.

"It is a scandal: this is not what a nationalised bank should be doing," he said.