12 Parties Compete for Cadbury's U.S. Drinks Business
Cadbury Schweppes has received about a dozen expressions of interest in its U.S. drinks business, a source close to the sale process said on Friday, raising hopes the sale price could top forecasts.
Shares in the world's largest confectionery maker were up 3.3% at 695.5 pence to value the Trident chewing gum and Dairy Milk chocolate maker at 14.6 billion pounds ($29 billion), having set a record high at 707.5 pence.
British-based Cadbury unveiled plans in March to split its sweets and drinks units, fuelling speculation at the time of a 7 billion pounds sale of its beverages business.
The Daily Telegraph newspaper reported on Friday two private equity consortiums were preparing 8 billion pound bids for Cadbury's U.S. drinks business which includes Dr Pepper and Snapple. Cadbury would not comment on the report.
"There are considerably more (interested parties) than in the Daily Telegraph report, about 12," the source told Reuters.
Cadbury's move in March was widely regarded as the company caving in to pressure from investors led by U.S. billionaire Nelson Peltz to sell or spin off its U.S. drinks unit.
Cadbury said the move would help unlock value for shareholders and came after it received support for the split from over 40% of its shareholders in meetings over the prior month.
Analysts said the move could leave the rest of the business more vulnerable to predators.
Cadbury's shares underperformed its food peers in 2006 due largely to a British salmonella-related chocolate recall and a Nigerian accounting scandal, but its prospects have improved in 2007 as it looks to introduce many new products.
Further details on the split are expected with the group's planned trading update on June 19.