The American food giant Kraft Foods Inc is likely to sweeten its hostile 10-billion pound takeover bid for the British chocolate maker Cadbury, says a media report.
"Irene Rosenfeld, chairperson and chief executive of Kraft Foods, will raise her offer in the next two weeks in a final attempt to persuade Cadbury shareholders to succumb to a bid," the Sunday Times said.
Cadbury has already rejected Kraft's existing offer as derisory and unappealing.
Kraft has to make a move by January 19, after that date it can make a higher offer only if a rival takeover bid is made by another suitor.
Meanwhile, another American chocolate maker, Hershey, is working up detailed plans for a rival offer for several weeks, but it is expected to wait to see the details of any improved offer from Kraft before making a move, the Sunday Times said.
"It (Hershey) may also wait for Cadbury to release critical trading information on January 15, as part of its defence against the Kraft bid," the report added.
Cadbury Chairman Roger Carr is expected to reject any bid from Hershey or Kraft unless it tops 800 pence a share. Cadbury shares closed at 797 pence on December 31 — 61 pence higher than Kraft's offer.
Cadbury would prefer a tie-up with Hershey, a pure confectionery business, rather than being subsumed into Kraft — a company it describes as a low-growth conglomerate, the report said.
Meanwhile, Swiss food giant Nestle and Ferrero Group of Italy are also waiting in the wings and could still bid.
"Ferrero is thought to have met Hershey and private equity firms, KKR and Blackstone, to discuss a possible bid for Cadbury, but nothing firm has so far been agreed," the daily said.
Kraft has told its own investors it will maintain a disciplined approach to the bid battle and will not sacrifice its credit rating.
Besides, Hershey also risks losing its investment-grade rating if it takes on too much debt to buy Cadbury.
