Cadbury confirms deadline extension

Cadbury Schweppes is extending its Americas Beverages auction due to volatility in the debt markets. Because of the credit squeeze, Americas Beverages is now likely to be sold for £7bn (US$14.2bn) to £7.5bn rather than an expected £8bn.

The drinks company confirmed last Friday (July 27) that it was extending the timetable for the sale of its Americas Beverages business, which makes 7-Up to Dr Pepper.

Cadbury said: “The sale process for Americas Beverages is ongoing, and that interest in the business remains strong. However, the leveraged debt markets have experienced extreme volatility in recent days. As a result, a decision has been taken to extend the sale timetable to allow bidders to complete their proposals against a more stable debt financing market.”

Blackstone, KKR and Lion Capital are understood to have formed one consortium, with a possible competing bid coming from Bain Capital Partners, Thomas H Lee Partners and TPG.

Reports suggest that Morgan Stanley, Goldman Sachs and UBS have lowered the amount of debt they will lend for the deal to 8.5x Ebitda from 9.5x in an attempt to ensure that they can syndicate the debt later. Final-round bids for Cadbury Schweppes’ US business were due in this week.

India’s Tata Group was rumoured to have submitted a bid for the US beverages business in an attempt to capture the hugely successful Snapple range of fruit drinks, diet drinks and iced teas.

The salt-to-software group was thought to be in talks with Blackstone and Lion Capital as a minor partner in their consortium.