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NEW YORK - As a Pennsylvania appellate court prepares to hear arguments on the sale of Hershey Foods Corp., Nestle SA and Cadbury PLC continue to discuss the terms of a potential joint bid for the company, people close to the situation told The Wall Street Journal.
Insiders said Nestle and Cadbury are considering a structure that would allow Nestle to buy Hershey and sell certain brands to Cadbury through a new partnership. The structure would be designed to minimize any tax penalties of a deal and allow Nestle to dispose of enough brands to satisfy antitrust authorities.
People close to the situation said Nestle and Cadbury haven't approached Hershey with the plan and that the talks remain informal. Several other bidders, including Kraft Foods Inc., have also expressed interest in Hershey and may decide to make competing bids if the Hershey sale is allowed to proceed.
A Pennsylvania appellate court is planning to hear arguments from both the trust that controls Hershey Foods and from Pennsylvania Attorney General Mike Fisher on Wednesday, regarding an injunction granted last week that temporarily delays a sale of the food company. While people close to the case expect a ruling in favor of a sale, the sale of Hershey has become highly politicized because of the potential impact of a deal on the local community.