Analyst: Kraft likely the only player for Cadbury

Cadbury Plc, the U.K. confectioner that last week rejected a proposed offer from Northfield-based Kraft Foods Inc., is "unlikely" to receive a competing bid, Bank of America analysts said in a note today.

Nestle SA, the world's largest food company, has been "cool in public to a deal," while U.S. chocolate maker Hershey Co. is "too small to buy even half of Cadbury on its own without making a material change to its capital structure," according to analysts including David Tovar in London. The companies have been reported to be considering teaming up for a combined offer.

Bank of America removed its recommendation on Cadbury, previously rated "neutral," because of the Kraft approach.

"We feel the price of Cadbury is now almost entirely dependent upon the outcome of potential deal with Kraft," Tovar said. An "aggressive" fair value for the U.K. candy maker's shares, not taking Kraft's approach into account, is "around 700p," he said. "If a deal does not occur, we think the share price is likely to decline below this value."

Cadbury rose 5 pence, or 0.6 percent, to 780.5 pence as of 1:28 p.m. in London trading today.

Kraft's cash-and-stock offer, worth 705.7 pence a share as of the close of trading on Sept. 11, does not need to include a "strategic asset premium" in the absence of other offers, Bank of America said. Cadbury shareholders may accept an offer of 20 percent to 25 percent more than the stock's fair value, or 840 to 880 pence a share, according to the analysts.