Cadbury Plc, the confectioner that rejected Kraft Foods Inc.’s bid Sunday, may attract suitors ranging from Nestle SA to Hershey Co. and sell for as much as $21 billion, according to analysts.
The U.K.-based maker of Dairy Milk chocolate and Trident chewing gum spurned Kraft’s $16.7 billion bid as “fundamentally inadequate,” and its shares surged past the offer price, suggesting investors are expecting a sweetened proposal from the Northfield, Ill.-based company or a rival offer.
Nestle, the only food company larger than Kraft, may be tempted to thwart its smaller rival’s ambitions to bulk up. It could team with Hershey to break up Cadbury, according to Evolution Securities, Panmure Gordon and Kepler Capital Markets.
Other potential predators include Kellogg Inc. and PepsiCo Inc. Kraft said it would keep trying to persuade Cadbury to start talks.
“We’re moving towards the end game of consolidation in confectionary,” said Simon Marshall-Lockyer, an analyst at Jefferies International in London, who has covered Nestle since at least 2001.
“The stakes are very high.”
Cadbury declined to comment on whether it had received interest from any other companies.
The biggest transaction in the candy business occurred last year, when Mars Inc., the privately held maker of M&Ms, bought Wm. Wrigley Jr Co. to surpass Cadbury as the world’s largest confectioner.
Cadbury has 10.3 percent of the world candy market, followed by Nestle’s 7.6 percent and Hershey’s 4.8 percent. Kraft has a 4.5 percent stake.
