Reports say the US confectioner is looking to raise $7bn (£4.2bn) to help it better Kraft’s £9.8bn for the Dairy Milk maker.
It is understood that Hershey will make its offer before Kraft starts to present details of its hostile bid to Cadbury’s shareholders.
Hershey is believed to be Cadbury chief executive Todd Stitzer’s preferred choice as it would be a better cultural fit. Last week, Stitzer was reported as stating that he would prefer “Cadbury to be in an environment where its values and principles could continue”.
The two already work together in the US, where Hershey distributes some Cadbury brands.
Swiss food company Nestlé is also reportedly considering a bid.
However, only Kraft has so far made an offer. It bid 300 pence and 0.2589 new Kraft shares for each Cadbury share at the start of the month. It has now gone “hostile”, approaching shareholders directly, after the Cadbury board rejected its initial September approach.
Cadbury executives said Kraft’s offer was “derisory”, adding it “does not come remotely close to reflecting the true value of our company”.