Hershey Preps Cadbury Bid: Report

HERSHEY, Pa. (TheStreet) -- Hershey(HSY Quote) is planning to bid at least $17.9 billion next week for Cadbury PLC(CBY Quote) , according to a published media report

Such an offer would top Kraft Foods'(KFT Quote) existing bid, which is valued at roughly $17.2 billion.

Hershey was wrapping up a financing package for such a deal on Friday, according to the report, published Saturday on The Wall Street Journal's Web site. The report cited anonymous sources familiar with the matter.

Under the package, Hershey plans to borrow at least $10 billion from banks including JPMorgan Chase(JPM Quote) and Bank of America's(BAC Quote) Merrill Lynch, according to the report.

The plan is also expected to include $5 billion in new Hershey shares and a minimum of $3 billion in financing from private investors and the Hershey trust, the report added.

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As currently envisaged, Hershey's offer would be from 800 pence to 820 pence (about $13.00 to $13.34) a share, vs. Kraft's existing offer of 770 pence (about $12.50).

David West, Hershey's CEO, who has argued against such a bid, has accepted its inevitability, according to the report, which added that Hershey's board has promised him the CEO's job in a merged company. Hershey and its trust declined to comment, according to The Wall Street Journal.

Kraft has until Tuesday to raise its current offer, while Hershey has another four days, until Jan. 23, to make a decision to bid

Hershey shares closed Friday at $36.25, while Cadbury's U.S.-listed shares ended the session at $51.90. Kraft stock ended the day at $29.58.

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