Cadbury shares soar on news of Kraft bid

Shares in UK confectionery firm Cadbury soared by nearly 40 percent yesterday on the news that it had rejected Northfield, Illinois-based KraftÔÇÖs $16.7 billion bid for the firm.  It is now thought that rivals Nestl├® and Hershey could form a consortium and submit their own bid, which would avoid regulatory complications arising from a straight Nestl├®/Cadbury, or Hershey/Cadbury, takeover.  Combined, Nestl├® and Cadbury would control more than half the chocolate market in the UK. It is thought that Hershey would take on CadburyÔÇÖs chocolate assets while Nestl├® would own rights to chewing gum. Nestl├® is the worldÔÇÖs largest food company, with Kraft being second. Pennsylvannia-based Hershey, however, is a much smaller player in the market, with an annual turnover eight times smaller than that of Kraft. Cadbury and Kraft could claim 15 percent of the global candy market if they joined forcesÔÇöequal to confectioner Mars and well ahead of Nestl├®, which currently holds 7.6 percent. Other potential bidders for Cadbury could include Kellogg, the biggest maker of breakfast cereal in the US, and drinks manufacturer PepsiCo, according to industry analysts. With its shares now having leapt well past KraftÔÇÖs offer price, analysts say that Cadbury is more likely to sell for a figure close to $21 billion.  A Kraft takeover of Cadbury would be the largest acquisition made by the US firm in Europe this year. A sweetened offer from Kraft is now expected. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *