LONDON/CHICAGO Italy's Ferrero and U.S.-based Hershey Co are considering a bid for chocolatier Cadbury Plc CBRY.L, but Kraft Foods Inc KFT.N is still seen as the front-runner with its $16.8 billion hostile offer.
Hershey (HSY.N) and family-owned Ferrero, the maker of Nutella chocolate spread, both said separately on Wednesday they were reviewing a possible bid, but gave no assurance that they would make an offer for the British confectioner.
The two were asked by the UK Takeover Panel to clarify their intentions after Reuters and other media reported that they were discussing a joint bid, news which pushed Cadbury's shares to their highest level in nearly a month.
Meanwhile Kraft locked in financing agreements with lenders backing its bid, a strategy likely to thwart counter offers, according to Reuters Loan Pricing Corp.
Cadbury said it would give proper consideration to "any serious offer that delivers full value for the company," but stressed it has yet to see such a bid.
Cadbury Chairman Roger Carr has dismissed Kraft's offer as "derisory."
The Ferrero and Hershey statements gave no hint that they might be working together on a joint bid. Analysts and investors doubt the two could rival the hostile cash-and-share offer from Kraft, though Cadbury could use the interest to extract a higher bid from Kraft.
"What it means for Kraft is if they are going to want to sign, seal and deliver this, they are going to have to up their bid," said Edward Jones analyst Jack Russo.
Investors also expressed doubts.
"It's a very long shot, and we would be very surprised if they got involved," said one top-10 Cadbury investor speaking on condition of anonymity, referring to Hershey and Ferrero.
Cadbury shares rose above 800 pence for the first time in almost a month to a high of 802-1/2p before easing to 797.6p, up 1.2 percent. The shares traded at more than a 10 percent premium to Kraft's offer, currently valued at 721p.
Kraft shares ended the day's trade down 1.4 percent to close to $27.26 and Hershey shares closed down more than 2 percent to $37.63.