Sweet bite: Nestle joins race, mulls Cadbury bid

Nestle is weighing options including a possible bid for Cadbury that would challenge Kraft Foods’s offer and a potential move by Hershey, according to two people with knowledge of the matter.
Nestle is reviewing its options with bankers and may decide against a bid, said the people, who asked not to be identified because the talks are private. Hershey and Ferrero said in statements last week that they were also evaluating options.Ferrero, the maker of Nutella, is unlikely to proceed with an offer, said three people briefed on the situation.
Kraft’s unsolicited $17 billion bid for Cadbury would create the largest maker of candy, threatening Nestle’s and Hershey’s market positions. Any bid by Nestle or Hershey may be countered with a higher offer from Kraft, which has never said its current cash-and-stock proposal is final.
“We’re not surprised there are rival bidders considering an offer given the attractiveness of Cadbury’s portfolio,” Erin Swanson, an analyst at Morningstar in Chicago, said. “Nestle hasn’t seemed interested in Cadbury, but from a defensive perspective, they could consider it and anything could happen.”
“We’re the only offer on the table, and we’re confident we’re the best, most logical partner for Cadbury,” Mike Mitchell, a Kraft spokesman, said. Spokesmen for Hershey and Nestle declined to comment. A representative from Cadbury also declined to comment. Nestle has an option to sell its majority stake in eye-care company Alcon to Novartis as early as January, and could use the proceeds, which may total more than $20 billion, to make acquisitions.
“That’s enough money to get you in the game for sure,” Brian Krawez, a senior research analyst at Scharf Investments in California, had earlier said. “I think they could blow Kraft out of the water.” Ferrero, the closely held candy maker based in Pino Torinese, Italy, is meeting in the coming days to make a decision on Cadbury, a person briefed on the matter said.