Hershey, charitable trust nears decision over Cadbury: report
Press Trust of India / New York Dec 10, 2009, 15:45 IST
American chocolate maker Hershey and the charitable trust that controls it are nearing a final decision on whether to bid for British confectionery major Cadbury, says a media report.
Attributing to people familiar with the matter, the report by the 'Wall Street Journal' said that Hershey and the Milton Hershey School Trust are nearing a final decision on whether to bid on Cadbury.
The two sides—- the Hershey management and the trust's board are tilting toward making a bid but have not made a final decision, the report said citing sources.
According to the publication, the key tension between the chocolate giant and the trust is whether to sacrifice the company's investment-grade credit rating in order to challenge Kraft Foods's existing $16.5 billion bid for Cadbury.
US-based firm is concerned that taking on the new debt would drive the company's debt ratings down to speculative grade, a move that could substantially raise the Hershey's future borrowing costs.
Meanwhile, the daily also said that talks with third parties, such as Italian chocolate giant Ferrero SpA, have been put on hold, and there have been no recent talks with Swiss food giant Nestle SA.
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