Hershey, Ferrero may jointly bid for Cadbury

Chocolate companies Hershey and Ferrero are reportedly working together to launch a possible joint bid for Cadbury.

The move comes after the maker of Dairy Milk chocolate rejected a renewed 9.8 billion pound hostile bid from American food giant Kraft Foods.

The talks are at a 'preliminary' stage and may or may not lead to an offer being made.

According to The Daily Telegraph, there is debate between the companies about which party would take possession of Cadbury's high-margin gum and candy businesses such as Trident and Halls.

Hershey, the Pennsylvanian chocolate company, has been seen as a potential counter-bidder ever since Kraft's interest in Cadbury became public in September. Meanwhile, privately-owned Ferrero and maker of the famous Ferrero Rocher chocolates is reportedly keen to expand with a partner.

On November 9, Kraft repeated the terms of its original proposal, and formalised its 9.8 billion pound hostile bid for Cadbury, valuing the British confectioner's shares at about 726 pence. Cadbury rejected the hostile offer, calling it 'derisory'.

Under Takeover Panel rules, Kraft has until December 7 to post its formal offer document to shareholders, and Cadbury must publish its defence document by December 21.