By Channel 4 News
Shares in chocolate giant Cadbury have risen following reports of a joint takeover bid from Hershey and Ferrero. Samira Ahmed spoke to city analyst David Buik.
The move could thwart a 9.8 billion hostile bid by American food giant KraftFoods to take over the firm. Last week, the Dairy Milk manufacturers rejected the offer.
Ferrero has confirmed it is "in the preliminary stages of evaluating its options in respect of Cadbury". Hershey already has a business relationship with Cadbury, holding a licence to make Dairy Milk bars and Cadbury Creme Eggs in the US.
City analyst David Buik, from BGC Partners, told Channel 4 News: "I think this is just creating a little bit of bid warfare which is amusing everybody. The fact remains that if there were a merger between Ferrero and Hershey the inevitability would be jobs cut.
"The other thing is I don't think that Irene Rosenfeld of Kraft has finished her business. They really need Cadbury in a very big way. The bid of £7.17 was derisive. They will have to come back to somewhere between £8.00 and £8.25."
Cadbury shares have gone up more than 1 per cent following news of the possible deal. The intervention will put pressure on Kraft - also behind Kenco coffee and Dairylea cheese - to improve its offer for the business.
But Britain's most famous chocolate-maker has said the Kraft bid did not come "remotely close" to reflecting the value of the company.
Cadbury began life as a grocer's shop in Birmingham in 1824. Dairy Milk is the UK's top-selling chocolate bar and more than 250 million are sold every year in 33 countries.
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