Cadbury has 12 groups vying for U.S. drinks: source

By Dan Lalor

LONDON (Reuters) - Cadbury Schweppes Plc (CBRY.L) has received about a dozen expressions of interest in its U.S. drinks business, a source close to the sale process said on Friday, raising hopes the sale price could top forecasts.

At 1454 GMT, shares in the world's largest confectionery maker were up 1.5 percent at 683-1/2 pence to value at 14.3 billion pounds ($28.20 billion), having set a record high at 707.5 pence earlier. The U.S. drinks business includes Dr Pepper and Snapple.

British-based Cadbury, the maker of Trident chewing gum and Dairy Milk chocolate, unveiled plans in March to split its sweets and drinks units, fuelling speculation at the time of a 7 billion-pound sale of its beverages business.

The Daily Telegraph newspaper reported on Friday two private equity consortiums were preparing 8 billion-pound bids for the U.S. drinks business. Cadbury would not comment on the report.

"There are considerably more (interested parties) than in the Daily Telegraph report, about 12," the source told Reuters.

Blackstone Group BG.UL, Kohlberg Kravis Roberts & Co. KKR.UL and Lion Capital have formed a consortium to bid for the unit, a different source familiar with the matter said.

Lion and Blackstone bought Cadbury's continental European beverages business for 1.85 billion euros ($2.50 billion) in February 2006.

Cadbury's move in March was widely regarded as the company conceding to pressure from investors led by U.S. billionaire Nelson Peltz to sell or spin off its U.S. drinks unit.

Cadbury said the move would help unlock value for shareholders and came after it received support for the split from more than 40 percent of its shareholders in meetings over the previous month.

Analysts said the move could leave the rest of the business more vulnerable to predators.

Cadbury shares underperformed its food peers in 2006 due largely to a salmonella-related chocolate recall in Britain and a Nigerian accounting scandal, but its prospects have improved in 2007 as it looks to introduce many new products.

Further details on the split are expected with the group's planned trading update on June 19.

(Additional reporting by Eleanor Wason)