LONDON -- Cadbury Schweppes plc said Friday that it has extended the timetable for taking bids for its U.S. beverage unit because of market volatility.
The company gave no details of the revised timetable, according to an Associated Press report. The division includes 7-Up, Dr Pepper soft drinks and Snapple beverages.
Cadbury Schweppes announces that the sale process for Americas Beverages is ongoing, and that interest in the business remains strong. However, the leveraged debt markets have experienced extreme volatility in recent [image-nocss] days. As a result, a decision has been taken to extend the sale timetable to allow bidders to complete their proposals against a more stable debt financing market, the company said in a press update posted on its website.
In late June, Cadbury Schweppes said in a statement that the separation of its confectionery business and Americas Beverages business was progressing well and that it continued to pursue a twin track process of either a sale or demerger.
It added, The sale process is actively underway, and following expressions of interest, we now believe that a sale is the more likely outcome.
Following separation, the core business will be renamed Cadbury plc. It also announced the strategy for Cadbury plc after its separation from Americas Beverages. Over the next four years, its aim is to simplify its organizational structure to allow better execution of a more focused commercial strategy.We believe the business has significant under-exploited potential. Our new strategy aims to leverage our scale and category benefits to realize this under-exploited potential, it said.
The company had announced in March that it planned to separate its drinks and candy businessesunder pressure from investors led by U.S. billionaire Nelson Peltzbut had not indicated whether it would sell the beverage business or spin it off to shareholders.
A sale would be expected to yield 7 billion pounds to 8 billion pounds ($14 billion to $16 billion), Jeremy Batstone-Carr, analyst at Charles Stanley in London, told AP.
Private-equity groups and the Canadian bottler Cott Corp., which makes private-label soft drinks for retailers like Wal-Mart Stores Inc., were thought to be among the possible bidders.
Cadbury, which also has products such as Dairy Milk chocolate and Trident Gum, had been under increasing pressure to revert to its origins as a confectionery company by spinning off the U.S. drinks business, particularly since it sold its European soft drink unit in 2005.
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