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Is Cadbury's turning sweet on Hershey?

It appears that the board of directors of UK chocolate giant Cadbury are turning sweet on US competitor Hershey ahead of the bid by Kraft Foods. Despite the fact that Hershey has yet to announce a formal offer for Cadbury, and the only off on the table is the £10 billion deal from Kraft Foods, it would appear that the board of directors are certainly favouring Hershey over Kraft Foods. So what will happen next?

At this point in time there is much bluster and poker faces at the table with Cadbury directors purely and simply looking to protect themselves and in the event of a takeover, guarantee the best price for their shareholders. The fact that Hershey is actually a smaller outfit, by market capitalisation, would appear to give the Cadbury board an opportunity to effectively organise a reverse takeover of Hershey and become more influential within the enlarged group.

There is no doubt that the Cadbury board of directors would have less influence with a successful merger with Kraft Foods as the US giant is much larger than Cadbury and would effectively swallow up the UK outfit. Despite speculation and rumour in the press, the only bid on the table at the moment is the one from Kraft Foods and until there is a change, anything else is pure and simple speculation.

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