Some people who  have internal access claim that Hershey is preparing a counter-bid to Kraft hostile offer for Cadbury.  They say that Hershey  can make a formal offer before the January 23 deadline, .

Such a Hershey bid would certainly be welcomed by Cadbury. Although Cadbury has not solicited a “white knight” bid from Hershey publicly, the confectioner has made clear that it would prefer Hershey to Kraft.

Roger Carr, the UK company’s chairman, has told the Financial Times that Hershey, which owns the rights to the Cadbury brand in the US, is “more appealing” from a cultural view. But Hershey would have to offer a higher price than Kraft’s present bid to win Cadbury’s support.

According to the  plan, Hershey will authorise Byron Trott, a former Goldman Sachs banker who runs his own investment firm, to attract private equity investors to the deal. Also, Hershey Trust is preparing to make an equity investment of $1.25bn (£767m). While the use of debt, which would be necessary for a bid in the range of Cadbury’s asking price, could threaten Hershey’s investment-grade credit status, it is said the bid being prepared “will probably be investment-grade and do-able”.

In the mean time, Irene Rosenfeld, Kraft’s CEO, met some of Cadbury’s top UK institutional investors in London on Wednesday in an effort to win their support. Cadbury shareholders must vote on Kraft’s offer by February 2. Investors said the meetings had not changed their decision to reject the offer unless Kraft raised the value of its cash-and-stock bid to close to 850p and added more cash. Less than half its current offer is in cash. Kraft is understood to be considering raising its offer before a UK Takeover Panel deadline on January 19.

These developments, not a surprise for  this blog's readers, will spice the game...It should be noted that Kraft will not give up easily. We may expect a new offer from Kraft before the deadline in order to streghten their position in the minds of Cadbury shareholders and to  force a Hershey to the corner. It is still too early to make an educated estimate on who will be the winner, although it is clear that Cadbury management will not keep being independent as they hope.