Cadbury: Hershey still interested in us
Cadbury Plc, the U.K. confectioner fighting a takeover offer from Kraft Foods Inc., said Hershey Co. remains interested in the Dairy Milk maker and would transform itself into a global business by trumping a bid from Northfield-based Kraft.
"In recent times they have reaffirmed their interest," Cadbury Chairman Roger Carr said on a conference call when asked about Hershey's intentions. "From our point of view we would help facilitate that in the way that we would help anyone, but we await an offer. There is no formal bid and may not be."
Cadbury climbed for a second day in London trading after the Financial Times reported that Hershey authorized a bid to be drawn up. An offer would challenge Kraft's 10.9 billion-pound ($17.8 billion) hostile bid for the Uxbridge, England-based maker of Creme Eggs and Halls cough drops. Kraft has until Jan. 19 to increase its 765 pence-per-share offer, while Hershey has until Jan. 23 to decide whether to make a counter-proposal.
Carr said a takeover of Cadbury by Hershey "would catapult them overnight into a world business," adding "that is an opportunity that has to be paid for."
Kirk Saville, a spokesman for Hershey, and Tim Reeves, a spokesman for the Hershey Trust Co., declined to comment on Carr's statements.
"When you look at the possible benefits of interacting with a pure-play focused business in a case like Hershey, focused on one area, clearly there are common values and that is clearly understood and stated," Cadbury's Carr said.
'Not For Sale'"We're not for sale. We've only had one derisory offer. Anybody that wants to come and bid a fair price we are here to listen. But apart from that we are going to run the business as an independent in the interest of our shareholders."Erin Swanson, an analyst with Morningstar Inc. in Chicago, said Carr's comments about Hershey were not specific enough to draw a conclusion about whether it will bid for Cadbury."I've never doubted the fact that Hershey's interested," Swanson said today in a telephone interview. "The big question is the financing. They already operate with a levered balance sheet, and a deal for Cadbury would more than double their size, so it's not a small undertaking." She recommends holding Hershey, Kraft and Cadbury.Cadbury said earlier that sales growth in emerging markets outpaced developed countries last year as it stepped up its case for resisting Kraft's takeover offer.Emerging MarketsSales in developed markets rose 2 percent in 2009, while revenue in emerging regions increased 9 percent, the maker of Trident gum said in a statement today. Total revenue growth accelerated to 6 percent in the second half from 4 percent in the first six months, Cadbury said. The sales figures exclude exchange rate movements, acquisitions and disposals."We generated good revenue growth despite the weakest economic conditions in 80 years," Chief Executive Officer Todd Stitzer said in the statement. Meeting the company's performance targets through 2013 is "challenging, though they'll be achievable," Stitzer said in a Jan. 12 interview.Cadbury said earlier this week that operating profit rose 19 percent to 808 million pounds and so-called organic revenue gained 5 percent to 6 billion pounds. The company's forecast through 2013 is for organic sales to increase between 5 percent and 7 percent annually.Chocolate sales growth slowed in the second half, while gum and candy revenue both increased after being unchanged in the first half, Cadbury said in today's statement.The candy maker also said its marketing as a percentage of sales fell by 0.5 percentage point in 2009, reflecting the benefits of falling media rates.Cadbury rose 9.5 pence, or 1.2 percent, to 799 pence in London trading, extending yesterday's 1.6 percent gain. Kraft fell 17 cents to $29.06 at 2:51 p.m. in New York Stock Exchange composite trading. Hershey gained 29 cents to $36.90.