LONDON -- A bid for Cadbury Schweppes PLC's U.S. beverages arm was rejected last week due to unfavorable financing conditions, a person familiar with the situation said Friday, according to The Wall Street Journal.
"It wasn't the valuation that was a problem, but the financing," the person told Dow Jones. "The financing would undermine the value of the deal."
The bid, thought to be worth between 6.4 billion ($12.99 billion) and 6.9 billion, was from a private-equity consortium comprising Blackstone Group LP, Kohlberg Kravitz Roberts &[image-nocss] amp; Co. and Lion Capital Holdings Inc., said the report.
The bid included a vendor-financing proposal which would have involved Cadbury in partly financing the sale, the person told the newspaper.
Cadbury announced its intention to separate its drinks armwhich makes Dr Pepper and 7UPfrom its core confectionery business in March. It said at the time that it would either sell the business or spin it off.
An initial bid from the Blackstone's consortium was made earlier in the year along with a rival bid from a consortium comprising Capital LLC, TPG Inc. and Thomas H. Lee Co., the report said.
The turmoil in the credit markets resulted in Cadbury delaying the sale process in July as the consortia struggled to raise financing, the Journal added.
The rejection of the latest offer would suggest that the company will now pursue a demerger rather than a sale, though a spokesperson for Cadbury told the paper that the company would "continue to pursue a twin-track process" with both a sale and a spin off possible. The company has refused to put a timetable on the process.
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