Cadbury Playing Hard-to-Get?

Cadbury turned down Kraft's surprise $16.7 billion takeover offer yesterday, but nobody seems to think that's the end of the story.

Cadbury is giving off mixed signals -- it said it just wanted to fly solo for the moment, but it also said the bid was too low. Kraft, meanwhile, is not ready to give up yet. CEO Irene Rosenfeld told the Chicago Tribune she expects "constructive dialog" with Cadbury in the near future.

Many think a takeover of Cadbury became inevitable when the company spun off its beverage divisions. There's a chance that Hershey or Nestle could step in with their own bids -- or even bid together, with Hershey taking the chocolate and confectionary brands and Nestle taking the gum business, though Nestle's CFO has reportedly stated the company is not interested in gum.

Mars has also been mentioned as a possible suitor, but this seems unlikely for antitrust reasons. Cadbury is the world's second-largest chocolate and candy company by sales, while Mars is the largest.

Kraft's offer was 31 percent above Cadbury's stock price at the time (which has since shot up), but a majority was in equity rather than cash, and UK shareholders have limits on how much U.S. stock they can hold.

The general consensus among analysts is that the bid needs to be higher -- or "sweetened," to use the obvious pun that no one has seemed able to resist.