Hershey and Ferrero mull Cadbury bid

US confectionary firm Hershey and Italian firm Ferrero are understood to be discussing a possible joint bid for Cadbury.

According to reports, the two have been discussing the move for several weeks although the talks have yet to result in any offer being made for Cadbury.

Any bid would rival the £9.8bn hostile bid launched by US food company Kraft last week.

Kraft is now approaching Cadbury shareholders directly after the board of the Dairy Milk rejected the offer.

Cadbury described the bid as a “derisory” offer that undervalued the company.

Kraft’s cash plus share offer is worth less than the £10.2bn approach made in September because its shares have decreased in value following a recent drop in quarterly revenues.

The resolve of the Cadbury board was strengthened by Kraft’s third quarter results, which saw the Dairylea and Capri-Sun maker report a 5.7% drop in sales for the three months to the end of September.

In contrast, the British confectionery company posted a 7% increase for the third quarter.

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