Hershey sweet deal reported
Published: November 21, 2009, 12:30 am
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NEW YORK (AP)— Hershey Co. may make a $17 billion bid forUKcandy company Cadbury PLC, topping the recent $16.5 billion hostile offer by Kraft Foods, the Wall Street Journal reported Friday.
The bid wouldn’t be ready for two weeks and the terms are in flux, the newspaper says people close to the matter have said. But the people said the charitable trust that controls the company and has complicated Hershey’s merger efforts in the past is now prodding CEO David West to beat Kraft’s offer, the Journal reports.
The offer is expected to include at least $10 billion in cash from Hershey, plus $2 billion in new Hershey shares and another $3 billion to $5 billion in cash from investors in exchange for equity in Hershey.
Hershey adviser Byron Trott, a former Goldman Sachs banker known for his close relationships with billionaire Warren Buffett and other major investors, is courting new investors. Buffett, whose investment firm Berkshire Hathaway is the biggest shareholder in Kraft, called Kraft’s original offer for Cadbury “pretty full.”
The trust would sell about $1 billion worth of assets but hopes to structure the deal to maintain control of Hershey, according to the Journal, which says Hershey and the trust are working with two banks to raise the money: JPMorgan Chase and Bank of America Merrill Lynch.
Representatives for Hershey, the Hershey trust and Cadbury declined to comment Friday.
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