Hershey Co’s controlling trust wants the candy company to make a $17 billion bid for British confectioner Cadbury Plc, the Wall Street Journal reported, citing unidentified people familiar with the matter.
A possible offer, which wouldn’t be ready for at least two weeks, would be worth more and have a higher cash component than Kraft Foods Inc’s bid for Cadbury, the newspaper reported. In one potential outcome, Hershey would contribute at least $10 billion in cash and $2 billion in new Hershey shares, the Journal said yesterday.
Former Goldman Sachs Group Inc banker Byron Trott is talking to investors about supplying an additional $3 billion to $5 billion in cash to help with the purchase, according to the newspaper. The trust would sell assets, though it would try to maintain control of Hershey, the Journal said.
Kraft made a hostile bid for Cadbury more than two months ago, totaling £10.4 billion ($17 billion), based on yesterday’s closing stock prices. The cash-and-share offer values Cadbury at 726 pence a share. The London-based maker of Creme Eggs and Trident gum, which closed at 801 pence yesterday, has traded above the bid price since the offer was made.
Hershey and the trust are working with JPMorgan Chase & Co and Bank of America Corp, according to the Journal.
Representatives of Hershey Co, Hershey Trust, JPMorgan and Bank of America declined to comment.
Northfield, Illinois-based Kraft, the maker of Oreo cookies and processed cheese, rose 20 cents to $27.17 yesterday on the New York Stock Exchange, while Hershey, the Hershey, Pennsylvania-based chocolatier, added 4 cents to $37.18.
Earlier this week, Ferrero SpA, the Italian maker of Tic Tacs and Nutella spread, and Hershey said they were considering their options for Cadbury.
