Ferrero Out? Cavity in Chocolate Merger… (CBY, KFT, HSY)

By Douglas A. McIntyre Updated Mar 26, 10:52AM EDT · Published Jan 12, 1:26PM EST

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Cadbury plc (NYSE: CBY) may have just found out that it might need to be a bit more receptive to Kraft Foods Inc. (NYSE: KFT) in the buyout process, if it even wants to get a buyout at ANY price. A report from Italy’s La Stampa is reporting that Ferrero is out of the running for Cadbury. This was noted as being out of it independently and out of a joint-bid with Hershey Co. (NYSE: HSY).

The issue here is a developing one, and one that has not been confirmed nor denied by Ferrero. This has also not been confirmed by Hershey nor by Kraft. Cadbury is down 0.6% at $50.10 in US ADRs.

Hershey shares are up 2.7% at $37.18, in part because Hershey is far too small to get involved on its own as an acquirer. The present offer from Kraft puts the deal at almost twice the size of Hershey today.

Kraft is up 0.7% at $29.01, and suddenly the stock is 4% short of its 52-week highs and it is now up 6.6% so far in 2010. This might begin to make one wonder a scandalous thought for a moment. Maybe Kraft never really wanted to pay up or really want Cadbury at all. Maybe it just needed to signal that it had its own house in order and was able to look forward rather than fixing its woes of the past.

JON C. OGG

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.