Hershey and Ferrero are considering a joint bid for Cadbury, which could help the UK confectioner fend off the hostile takeover bid by Kraft Foods.

Although discussions between the two sides are said to be at a very early stage, the talks represent the strongest sign to date of a possible rival to Kraft’s £9.8bn offer, which Cadbury rejected.

However, a Cadbury source told the Financial Times: “Cadbury has heard nothing from Ferrero or people acting for it. Cadbury is not up for sale, but the company would give proper consideration to any offer that valued it properly.”

Hershey is said to have adopted a more aggressive stance over pursuing a deal. Analysts have said neither Ferrero nor Hershey appeared to be in a financial position to take on Cadbury individually.

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