US chocolate giant Hershey is in talks with Italian confectioner Ferrero over a possible joint bid for Cadbury, it has been reported.
Executives for both potential co-suitors are said to have been in discussions for a number of weeks but have yet to agree on an offer, the Wall Street Journal said, citing people familiar with the potential tie-up.
The move comes after last week's announcement of a hostile £9.8 billion offer for the Dairy Milk-maker by American food giant Kraft.
Kraft appealed straight to the UK firm's investors after its initial approach was rejected by the board in September.
Cadbury called the bid "derisory," with chairman Roger Carr adding that it did not come "remotely close to reflecting the true value of the company".
Kraft responded by insisting the offer was "fair and attractive".
The reported discussions between Hershey and Ferrero are believed to be in the preliminary stages with talk on financial specifics not yet made, the Wall Street Journal reported.
It also remains unclear if an offer will be forthcoming.
Neither Hershey nor Cadbury would comment on the report.
