AP: Hershey works on solo bid for Cadbury

HARRISBURG, Pa. — The Hershey Co. is assembling a bid to acquire British candy maker Cadbury PLC without the help of Italian candy maker Ferrero International, a person familiar with Hershey's plans told The Associated Press on Wednesday.

Meanwhile, the company that bid first, American food giant Kraft, continued to defend its offer and issued an earnings forecast that may have been intended to show off its strength.

Hershey has been working on two parallel bids for Cadbury — one with Ferrero and one on its own. But Ferrero reportedly has withdrawn. Hershey is still crafting its own potential bid, the person familiar with Hershey said.

The person, who spoke on condition of anonymity because the person was not authorized to speak publicly about the matter, said Hershey hoped to avoid a bidding war by waiting until Cadbury's shareholders decide on a competing $16.5 billion bid by Kraft Foods Inc.

Kraft has until Feb. 2 to win support from a majority of shareholders. It said last week that it had received acceptance from holders of 1.5 percent of Cadbury shares to date. Kraft's deadline to increase its bid is Jan. 19.

A spokesman for the maker of Hershey's Kisses and Reese's peanut butter cups said that, as a matter of policy, the company does not comment on merger and acquisition issues.

Cadbury shares rose, adding 12.5 pence, or 1.6 percent, to close at 789.50 on the London Stock Exchange. Hershey shares fell 93 cents to $36.82 in afternoon trading on the New York Stock Exchange.

An Italian business daily reported Wednesday that Ferrero International SA is no longer interested in bidding for Cadbury. The paper, il Sole 24 Ore, cited unidentified sources close to the family-run Italian firm.

Ferrero did not comment on the report.

Any bid for Cadbury would involve bringing jobs and assets to Hershey, while voting control of the company would remain with the charitable trust set up by its late founder, Milton S. Hershey, the person said.

In November, Hershey and Ferrero told the London Stock Exchange they were considering an offer for Cadbury but cautioned one might not materialize.

Without a well-financed partner, analysts question how Hershey alone can afford the acquisition of the larger Cadbury. Hershey is America's most recognizable name in chocolate, but it is dwarfed by some of the world's other major candy makers, including Mars Inc. and Nestle SA.