Hershey Suitors Close to Putting Bids on Table

Potential buyers for U.S. confectionery giant Hershey Foods Corp. are close to putting their bids on the table, despite ongoing legal hitches, sources familiar with the situation said.

Chocolate makers Cadbury Schweppes of Britain and Nestle of Switzerland, meanwhile, are close to an agreement on a joint bid for the company, famous for its Hershey’s Kisses and chocolate bars, sources said.

Analysts have said the deal, which has attracted attention from Northfield, Ill.-based Kraft Foods Inc., could net $12 billion or more.

Nestle and Cadbury are planning a deal that would envisage Nestle buying Hershey and then passing on some brands to the British confectionery and soft drinks firm, sources close to the talks said. This would also facilitate regulatory approval.

A source close to Cadbury said it would seek to take control of its own brands licensed to Hershey in the United States as well as other brands and the means to distribute the products.

Spokesmen for Cadbury and Nestle declined to comment on whether they were in talks.

A Pennsylvania judge last week put the sale of Hershey on hold, throwing the planned auction of the fabled candy maker in doubt and preventing any sale until he can determine whether it needs court approval. However, sources close to Nestle and Cadbury have said the companies are confident a sale will go through.