Europe’s largest food company, Nestlé, is no longer ignoring the predators surrounding chocolate and confectionery giant Cadbury and is ready to enter the fray, reports from Switzerland say.

In new developments to the Cadbury saga:

• Nestlé is weighing options about whether to mount a counter bid for Cadbury to those of Kraft Foods and potential ones from Hershey and Ferrero

• Insiders say Nestlé may decide not go ahead and the company itself is not commenting

• Hershey Trust urged to top Kraft's offer with $US17 billion bid

• Hershey to meet Ferrero, the Italian chocolate company, over a possible joint bid for Cadbury

• Cadbury’s chairman Roger Carr says he prefers a Hershey bid over Kraft

Bloomberg has reported Nestlé executives are reviewing their options with bankers to enter a bidding war after Kraft lodged its hostile £10.4 billion bid a fortnight ago.

Kraft, whose bid is considered inadequate by Cadbury and most analysts, is keeping its options open as well, with a higher offer on the cards should rival bids emerge.

So far these have been speculation, though both Ferrero and Hershey have separately confirmed their interest in Cadbury. The Italian maedia have reported the two are meeting this week to discuss their bids.

Kraft has never said its current cash-and-stock proposal is final.

Nestlé does not have the financial constraints of either Hershey or Ferrero – one is a charitable trust and the other a family business – but its size will be an issue.

In many markets, such as New Zealand, Cadbury and Nestlé are the dominant chocolate brands.

Cadbury’s non-chocolate confectionery lines are dominated by its Trident chewing gum, a product Nestlé lacks.

But like Kraft, Nestlé is a food conglomerate with global reach and interests ranging from dairy products to snacks and beverages.

Plenty is at stake. A Kraft-Cadbury tie-up would create the world’s largest food and confectionery company, threatening Nestlé's position.

The Wall Street Journal has reported Hershey’s controlling trust wants the company to make a $US17 billion offer but Nestlé has more options and resources, such as the sale of its majority stake in eye-care company Alcon to Novartis.

Nestlé said in October it was likely to exercise its option beginning in January 2010 to sell its remaining 52% stake in Alcon, potentially raising up to $US28 billion.

The Journal report says Hershey can raise up to $US10 billion, but will need another $US3-5 billion in extra cash.

Ferrero, a global chocolate brand, will be similarly stretched to mount a solo bid but a joint bid would mean the break up of Cadbury.

The eventual outcome is complicated by relationships between some of the companies. Hershey has a licence to make and sell Cadbury products in the US, so has a strong interest in ensuring a rival doesn’t gain control of the UK company.

Hershey also has the US licence for Nestlé’s Kit Kat brand, worth around $US3 billion.

Meanwhile, Cadbury's chairman Roger Carr, has told the Sunday Telegraph in London his group would prefer a merger with Hershey rather than Kraft, adding that both bids could fail should they not be generous enough.