ClickAJob News

Cadbury Schweppes has reportedly rejected a bid for its North American drinks unit, put forward by a private equity consortium.

According to the Financial Times newspaper, the confectionary giant turned down an offer of between £6.4 billion and £6.9 billion for its US drinks unit last week.

The newspaper suggested that Cadbury rejected the bid, understood to have been put forward by a consortium including the Blackstone Group, Kohlberg Kravis Roberts & Co and Lion Capital, on the grounds that it would have involved the company financing part of the sale.

Analysts say that it is now increasingly likely that Cadbury will demerge its beverages business.

The company announced in March that it had decided to either spin-off or sell the drinks unit, which makes the Dr Pepper and 7Up brands.

At the end of July Cadbury announced that it was extending the sale timetable for the unit in order to allow bidders more time to complete their offers given the "extreme volatility" seen on the world's financial markets.

It is believed that the turmoil is making it harder for private equity firms to obtain finance to fund takeover deals and Cadbury said at the time that it wanted to give potential buyers the opportunity to finalise their bids "against a more stable debt-financing market".

Commenting on the likely future for the Cadbury drinks business, Panmure Gordon analyst Graham Jones told the Reuters news agency: "We believe Cadbury will continue to pursue a dual-track approach for another few months, to give debt markets time to settle down, but that by the end of the year if an acceptable bid is not forthcoming they will press the demerger button."