Investor takes a bite out of Cadbury

Cadbury said in a statement released yesterday: "In response to market speculation, Cadbury Schweppes confirms that it has been informed by Nelson Peltz that he and certain of his affiliates have interests in 62,465,267 Cadbury Schweppes shares, representing 2.98 per cent of Cadbury Schweppes' share capital."

The move is not Peltz's first foray into the food and drink industry.

The billionaire businessman bought drinks company Snapple in 1997 before selling it to Cadbury three years later.

Peltz currently sits on the board of US food manufacturer Heinz.

His position on the Heinz board was hard won after he gained 5.5 per cent share in the company last year and commentators are wondering if he is looking to pursue the same strategy to take a place on the Cadbury board.

The Cadbury acquisition is held through Peltz's investment partnership Trian Fund Management.

The deal has fuelled rumours that Cadbury could be gearing up for a possible takeover.

UK newspaper, the Times, has reported that the owner of the Dairy Milk, Crème Egg and Trident brands is set for a £12.6 billion (€18.4bn) break-up of the company which will involve the sale of its £6.5 billion (€9.5bn) drinks empire.

Division of the business is likely to be a result of a tough trading year for the chocolate manufacturer.

Last summer a salmonella contamination in the UK cost the company £30 million (€44.5m)

but this figure could well rise as local authorities examine the case for prosecution.

In addition, at the end of last year, Cadbury discovered its Nigerian operations were deliberately overstating profits and estimated that operating loss from the irregularities would amount to £5m (€7.4m) - £10m (€14.8m).

Media reports this week indicate that shareholders in Nigeria are to sue the company for access to the report into the scandal, further upping costs.

As yet, Cadbury's has not confirmed that legal action is indeed being taken.