The future of Cadbury's – whose UK confectionery operations are centred on the historic Bournville factory in Birmingham – look to be assured despite the decision by parent group Cadbury Schweppes to split itself up.
Yesterday's announcement, which followed days of speculation, raised fears that the worldwide Cadbury Trebor Bassett sweets business could be left exposed to a takeover by a rival such as Hershey, Nestle or Mars.
Parallels were drawn between Cadbury and H J Heinz, the food giant that recently closed the equally iconic H P Sauce factory at Aston Cross and transferred production to the Netherlands with the loss of more than 100 jobs following a major shake-up of operations.
The common factor is American corporate raider Nelson Peltz whose aggressive investment firm, Trian Fund Management, sparked off ructions at Heinz and who is now a three per cent shareholder in Cadbury Schweppes.
Soundings taken by The Birmingham Post last night indicated, however, that ownership of the Cadbury's business, which also has operations at Marlbrook in Herefordshire and Somerdale near Bristol, is unlikely to change.
One City analyst, Keith Bowman of Hargreaves Lansdown, said: "There is bound to be speculation about whether the business will attract a takeover bid.
"But the confectionary business is strong enough to remain independent – if that is what the board decides."
Cadbury Schweppes yesterday announced that it planned to split its American beverages business, which includes brands such as 7Up and Dr Pepper, from the confectionery operations.
The City has been awash with rumours that the company was planning such a move for some time and Mr Peltz and Trian's involvement is believed to have been the catalyst for yesterday's announcement.
Cadbury, the world's biggest confectionery company with an estimated ten per cent of the global market, said, though, that it had been talking to investors for the last month and had won support for the split from more than 40 per cent.
The FTSE 100 Index company, which is worth more than #12.5 billion, will provide further details in June on how it plans to carry out the split.
Its shares gained a further three per cent yesterday to close 18p up at 620p.
A spokeswoman told The Post that so far the break-up of the business is being considered purely in global terms with no discussion taking place the implications for individual units such as Bournville.
One option being touted yesterday was that the board could offer shareholders two shares for every one they currently hold – one in the confectionery arm and the other in the soft drinks business, which is thought to be attracting interest from private equity raiders.
Chairman Sir John Sunderland said the announcement was of "great significance" and added: "We believe now is the moment to separate and give both management teams the focused opportunity to extract the full potential inherent in these excellent businesses."
Graham Jones, an analyst at Panmure Gordon, said: "We would love to believe Cadbury Confectionery will be a stock trading on the London Stock Exchange in six months’ time, but we doubt that will happen."
He placed a possible price tag of #10 billion on the confectionery business, with soft drinks thought to be worth in the region of #7.5 billion.
Keith Bowman of Hargreaves Lansdown Stockbrokers said: "Despite repeated comments by management that confectionery and beverages fitted, the status quo looks to have been taken out of their hands."