Kraft Focuses On Trade Buyers For Polish Wedel - Sources

24th Jun 2010 17:40

By Marietta Cauchi and Marynia Kruk Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Kraft Foods Inc. (KFT) is focusing on trade buyers for its Polish business, E. Wedel, squeezing out buyout firms that remained in the process, people familiar with the situation said Thursday. U.S. confectioner Hershey Co. (HSY) and Swiss giant Nestle S.A. (NESN.VX) are the preferred bidders, the people added. Disposals of Kraft's Polish and Romanian assets were imposed by the European Union as a condition of allowing Kraft's February takeover of Cadbury PLC. The company whittled down the list of potential buyers to a shortlist of six, including two buyout firms and four strategic players, and earlier this month Kraft extended the deadline for final bids from June 14 without fixing an alternative date. Private equity firm Bridgepoint is no longer in the auction and it is unclear whether Advent International, the only other shortlisted private equity firm, is still involved, people said. One person said that the timeline of the transaction now depends on whether Kraft gets an extension to close later than the beginning of August. The person added that once Kraft has selected one bidder for exclusive talks, that bidder must file an application with Poland's anti-trust authority, which hasn't happened yet. HSBC Holdings PLC (HBC) is running the auction for Wedel, one of Cadbury's Polish businesses; while BNP Paribas SA (BNP.FR) has been hired to run the sale of Cadbury's Romanian business, Kandia-Excelent. Wedel is valued at about 770 million zlotys ($231 million) or 11 times earnings before interest, taxes, depreciation and amortization of about 70 million zlotys, people said. Part of the problem with valuing the transaction is that it is an asset carve-out and not a free-standing business. Several people familiar with the situation said that Wedel is more likely to be bought by a strategic player than a private equity firm, which wouldn't have the same level of synergies that a large multinational or local company would bring. A Kraft spokesman declined to comment on potential buyers for the Wedel business. Hershey also declined comment. A representative for Nestle said that "as a matter of principle, we do not comment on market rumors." -By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; [email protected] (Jessica Hodgson in London, Goran Mijuk in Zurich and Anjali Cordeiro in New York contributed to this item.). (END) Dow Jones Newswires June 24, 2010 12:40 ET (16:40 GMT)