Ferrero, the Italian chocolate maker, was on Tuesday night debating abandoning a pursuit of Cadbury as the UK confectioner’s top executives launched a stinging attack on Kraft’s £10.4bn ($16.8bn) hostile bid.People familiar with the situation said the Ferrero family, which controls the group, was close to dropping out of the Cadbury battle following a decision by Michele Ferrero, the group’s chairman.The Italian group, famous for its Rocher chocolates and TicTac sweets, had been
considering a counter-offer for Cadbury, possibly with the US’s Hershey. Ferrero had lined up €4.5bn ($6.5bn) of commitments from banks in the event that it participated in any counter-offer. But Mr Ferrero was understood to be against the move because it involved too much debt for a company that has traditionally not made acquisitions.However, Rothschild, Ferrero’s financial adviser, insisted the group should not be ruled out. Akeel Sachak, global head of consumer banking at Rothschild, said: “We haven’t made a decision about anything.”Another person familiar with the talks between Mr Ferrero and his two sons said: “There is no consensus in the family.”The withdrawal of Ferrero would reduce the chance of a competing bid emerging ahead of a Takeover Panel deadline for counter-offers in late January. Cadbury’s shares fell 4p in London on Tuesday
to 777p amid expectations the UK confectioner couldescape the clutches of Kraft after making a strong case for remaining independent. Kraft, meanwhile, raised its 2009 profit forecast on Tuesday and said it was well-positioned for ”sustainable top-tier performance, with or without Cadbury”. The company on Tuesday released the second part of its defence against Kraft, issuing healthy 2009 financial figures.Roger Carr, Cadbury’s chairman, said Kraft needed to make a “step change in its position” if it wanted to enter talks. The defence came as big UK institutional investors were called to talks on Thursday with the
UK government over their role in City takeovers, with Kraft’s bid for Cadbury expected to be high on the agenda.