Cadbury looking to encourage Hershey counterbid: report

Posted by Daniel Palmer on 7th January 2010

The Board of Cadbury has reportedly spoken with members of the Hershey Board in attempt to coax a counterbid to the Kraft proposal, which Cadbury has consistently labelled as “derisory”.
According to the Wall Street Journal, Cadbury has informed Hershey of the offer price that would draw their support – although their preference remains to operate as a standalone business.

“Cadbury wants a friendly deal, a white knight as an option, so there are ongoing, back-channel talks,” a source close to the situation told WSJ.

The paper said discussions between the two boards had been taking place for a month, with talks becoming more frequent recently.

Despite obvious tension between Cadbury and Kraft and Cadbury’s view of Hershey as a better fit, the company has maintained that shareholder value is the cornerstone behind their approval of any bid rather than the identity of the bidder.

“We are not looking for a white knight and remain focused on demonstrating the value and potential of Cadbury as the world’s greatest confectioner,” Phil Denning, a Cadbury spokesman, told the Wall Street Journal. “…We are focused on delivering value to our shareholders, and unless and until we have a credible offer that adequately reflects the strength of this business, there is nothing to comment upon.”

It is believed that Hershey’s board members are remain divided over the prospect of a bid.