Cadbury confirms bid plans

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Confirmation by Cadbury- Schweppes that it is in talks that could lead to a £1bn-plus recommended takeover of Dr Pepper/Seven-Up companies of the US saw shares in the UK company dip 12p to 385p. Cadbury's shares, also affected by the general market fall yesterday, were hit by the confirmation that any deal would probably involve issuing new shares to raise £500m.

Many City pundits felt Cadbury's official statement to the Stock Exchange was prompted by widespread leaks of the transatlantic tie-up.

A Cadbury spokeswoman said this was "not necessarily"the case, but said:"We wanted to make sure that the market was informed at an early stage."

She declined to comment on the speculated price of any takeover of Dr Pepper/Seven-Up, or the likely timing of any further announcement.

One broking analyst said that Cadbury's hand was probably forced on disclosure by takeover speculation and leaks.

However, there was no logical objection to a merger, he said. Cadbury owns 25.3 per cent of the common stock of Dr Pepper/Seven-Up, based in Dallas, acquired at an average cost of $15 (£10) a share.

Cadbury said yesterday that it intended any "business combination" would be financed by both debt and equity.

A takeover would make Cadbury the biggest non-cola soft drink supplier in the world. Dr Pepper merged with Seven-Up in 1988 and has about 8 per cent of the US soft drinks market.