Hershey considering Cadbury bid

US chocolate maker Hershey is considering making an offer of $17 billion for UK confectionery firm Cadbury, according to reports.  It is believed that Hershey has lined up funding from Bank of America and JP Morgan in order to make a solo approach to rival the US food giant Kraft.  Reports last week indicated that Hershey was planning to team up with Italian chocolate maker Ferrero to make an offer for Cadbury, but according to the Wall Street Journal, the Pennsylvania-based firm will now pursue its bid alone.  Kraft has already made a $16.7 billion offer for the UK firm, which was rejected by its chairman as ÔÇ£derisoryÔÇØ. The entrance of another bidder like Hershey would be welcomed by Cadbury, it is widely believed, if only to strengthen its negotiating position against Kraft.  It is understood that Cadbury would favor a merger with Hershey over Kraft, since the former is a pure confectionary company, but only at the right price.  The UK company would probably reject a $17 billion offer from Hershey, which would equate to around 750p per share. Cadbury is said to be seeking no less than 800p per share from a bidder.  HersheyÔÇÖs largest shareholder is the Hershey Trust, which oversees a school for underprivileged children, and it is understood that some of the financial and legal hurdles it would have to overcome in order to make an offer would leave it at a disadvantage against other biddersÔÇönamely Kraft, which could move quickly.  The Hershey Trust must obtain the approval of the Pennsylvania state attorney general for any transaction that could threaten its effective control of the company.  In the past, the trust has been reluctant to pursue acquisitions but it is thought that the prospect of a combined Cadbury-Kraft business following the merger between Mars and Wrigley last year could now prompt it into taking action to protect its own position in the marketplace.  HersheyÔÇÖs market value is around $8.5 billionÔÇöa fraction of KraftÔÇÖs, which is $40.1 billion, and less than half of CadburyÔÇÖs, which is $18.2 billion.  Nonetheless, Hershey has reportedly been pondering which assets it could sell in order to raise the funds for a bid.  A formal approach from Hershey to Cadbury is thought to be weeks away, however.  Cadbury chairman Roger Carr told the UKÔÇÖs Sunday Times newspaper: ÔÇ£We are not for sale but Kraft has put us into play so we will give serious consideration to any valuable, deliverable offer from a credible source.ÔÇØ  Cadbury and its advisers are thought to be drawing up a defense document to fend off the Kraft bid.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *