UPDATE 1-Any Ferrero bid for Cadbury to be friendly -source

(Adds quotes on Ferrero cash position, background)

* Ferrero declines comment

* Sector specialist says Ferrero has ample liquidity

* Could consider delisting, sector specialist says

By Paola Arosio

MILAN, Nov 19 (Reuters) - Any bid for UK confectioner Cadbury CBRY.L by Italian chocolate maker Ferrero would have to be friendly, an Italian source close to the matter told Reuters on Thursday.

"You cannot do an operation of this kind unless it's friendly," the source said, speaking on condition of anonymity.

Ferrero declined to comment.

Cadbury is currently facing a $16.5 billion hostile bid from Kraft Food Inc KFT.N, and on Wednesday, U.S.-based Hershey Co (HSY.N) and family-owned Ferrero said separately they were reviewing a possible rival bid.

They did not specify whether they would combine efforts or prepare two different offers. [ID:nLI564317]

A friendly offer in such circumstances usually includes a sweetener for shareholders and some continuity of management.

The source added that there is currently "a lot of uncertainty and any outcome is possible."

Ferrero has never made an acquisition before so any offer would mark a dramatic change in strategy for the company, which was founded in 1946.

One specialist in the sector said a deal should not stretch Ferrero financially.

"The acquisition could be done with no impact on its financial position, since Ferrero has a lot of cash at a time when most companies have very little cash to invest," said Massimiliano Bruni, director of the Masters' degree course in fine food and beverage at Milan's Bocconi University.

A Ferrero spokesman declined to comment on the company's liquidity.

Bruni said he thought Ferrero might delist the company if a bid were successful. "I don't think they'd be ready to manage a listed company which requires a communication flow that they are not used to," he said.

The Ferrero family and company have traditionally been very secretive and shunned publicity. [ID:nLI86486]

Their offices have been flooded with calls from journalists since reports first emerged the company might consider a bid.

"Every new thing is a surprise," runs the song for those holding on Ferrero's overworked phone lines.

Bruni added that there would be synergies in terms of product range and sales forces between the two companies.

Cadbury is strong in chewing gum and candy, for example -- areas where Ferrero has less of a presence, and there could also be synergies in sales force and distribution.