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Will Hershey have to bid £8.60 a share for Cadbury?

The twists and turns regarding the Cadbury takeover continue with speculation in the market today that Hershey is on the verge of launching its own independent bid for the operation. While analysts are sceptical as to whether the company could match the financial power of Kraft Foods, assuming Kraft Foods is determined to acquire Cadbury, some analysts expect a bid in excess of £8 a share and possibly as high as £8.60 per share.

While analysts at Jefferies International believe that there is only a 15% chance of Hershey actually spoiling the party for Kraft Foods, it has added to the speculation and we saw the Cadbury share price move ahead today. When you consider that Hershey itself is only valued at around £6 billion the acquisition of Cadbury's, which would cost in excess of £11 billion, is a big risk and a big gamble to take.

We are moving towards deadline day regarding final offers for the company and speculation is beginning to mount regarding a potential auction between Kraft Foods and Hershey, although many believe it is really a one horse race. However, holders of Cadbury shares will no doubt appreciate the speculation which has pushed the price higher over the last couple of days.

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