American chocolate maker Hershey Co is unlikely to bid for British confectionery major Cadbury as the company is "too small" to support the debt load needed to make an offer, says a media report.
Attributing to people familiar with the situation The Wall Street Journal said that Hershey Co remains stymied in its ability to assemble a bid for Cadbury PLC, likely leaving the UK sweets company with few alternatives to an unsolicited takeover offer from Kraft Foods.
Hershey executives and the charitable trust that controls the chocolate maker have been considering counter moves since Kraft made public its interest in Cadbury nearly a month ago. But so far Hershey has no financing or strategic plan for a bid, the report said.
That's largely because Hershey, with $5 billion in annual revenue, is too small to support the debt load needed to make a competing offer, the report said citing people familiar with the plan.
Quoting one person who knows about plan the report said, "Hershey realises it is several billion short of matching the current offer."
The pressure on Hershey and Kraft increased Wednesday as the UK Panel on Takeovers and Mergers ordered Kraft to make a formal bid for Cadbury by November 9 or go away.
