But Hershey authorized drawing up a bid for Cadbury and a formal offer could be made within two weeks, The Financial Times said, citing a person familiar with the matter. Hershey has until January 23 [image-nocss] to make a bid under Britain's Takeover Panel rules, said the report.
A source told Reuters, however, that Hershey has not decided whether it will make a formal offer. Hershey officials declined comment.
The revived talk of a Hershey bid came as Northfield, Ill.-based Kraft's chief executive officer, Irene Rosenfeld, tried to woo Cadbury shareholders in London, paying visits to their offices, the report said. Rosenfeld found some of those doors closed as a number of Cadbury shareholders declined to meet while Kraft sticks to an offer they think is too low.
"It is highly possible that we will have some dialogue with Kraft if they come up with a higher offer next week," one top-20 Cadbury investor who declined to meet with Rosenfeld told the newspaper. The investor was referring to expectations that Kraft would raise its bid by a January 19 deadline.
Hershey has struggled to come up with financing for a deal to take on a company more than twice its size. Nestle and Ferrero, potential partners for a Hershey bid, also dropped out of the running in the last week, the report said.
According to the Financial Times, Hershey was discussing a plan to authorize a banker, Byron Trott, to bring private-equity investors into the deal and limit the amount of debt the company would take on. Trott is a favorite adviser of Warren Buffett, whose Berkshire Hathaway is the largest single shareholder in Kraft.
Cadbury investors have until February 2 to respond to Kraft's offer. On Tuesday, the company offered its final defense against Kraft, delivering higher margins and promising a raised dividend.
Meanwhile, Peter Mandelson, the British secretary of state for business, was expected to add his weight to union calls for Cadbury shareholders to resist Kraft, said the report. Mandelson called a group of institutional investors to discuss their role in foreign takeovers of British businesses on Thursday, and Kraft's offer for Cadbury was expected to be at the top of his agenda. Institutional investors will be led by Keith Skeoch, CEO of Standard Life Investments, one of Cadbury's biggest investors.
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