US chocolate maker Hershey Co is still working on a bid for Cadbury Plc that would top Kraft's hostile $17 billion takeover offer, a source familiar with the matter said on Wednesday.
Hershey authorized drawing up a bid for Cadbury and a formal offer could be made within two weeks, the Financial Times said, citing a person familiar with the matter. Hershey has until January 23 to make a bid under UK Takeover Panel rules.
But a source told Reuters that Hershey has not decided whether it will make a formal offer. Hershey officials declined comment.
The revived talk of a Hershey bid came as Kraft Chief Executive Irene Rosenfeld tried to woo Cadbury shareholders in London, paying visits to their offices.
Rosenfeld found some of those doors closed as a number of Cadbury shareholders declined to meet while Kraft sticks to an offer they think is too low.
“It is highly possible that we will have some dialogue with Kraft if they come up with a higher offer next week,” said one top 20 Cadbury investor who declined to meet with Rosenfeld. The investor was referring to expectations that Kraft would raise its bid by a January 19 deadline.
But the investor did not believe Kraft, or Cadbury, could divulge new information that was not already public.
“Arguably we are still in the phony war phase now,” the investor said. “I think with all the time and money invested so far, Kraft is unlikely to walk away. There is scope to improve the offer.”
Kraft declined to give details on Rosenfeld's itinerary.
Kraft has offered cash and stock worth Ł10.51 billion ($17.12 billion), or 769.1p per Cadbury share. That is 2.6% below Cadbury's price on Wednesday.
Kraft shares closed down 0.2% following the reports on Hershey. Hershey shares fell 3%. (Reuters)