TURMOIL in the American bond markets is likely to knock at least £500m off the price that Cadbury Schweppes secures for the sale of its US drinks business, advisers believe.

When Cadbury put the drinks operation up for sale four months ago, investors speculated that the company might get a price of £8 billion or more.

But the cost of borrowing has since increased – making it more expensive for private-equity bidders to fund a purchase of the business.

Now sources close to Cadbury are suggesting that they expect to raise no more than £7.5 billion.

Cadbury announced the disposal of its American drinks business, best known for brands including Dr Pepper, 7-Up and Snapple, after the American activist investor Nelson Peltz built up a stake of 3% in the confectionery group.

Two consortiums are thought to be the main contenders to buy the drinks operation.

The first includes Bain Capital Partners, Thomas H Lee Partners and Texas Pacific Group. A second involves Blackstone, Kohl-berg Kravis Roberts and Lion Capital.

Cott, a Canadian company that mainly produces own-brand drinks, has filed papers with the US Securities and Exchange Commission signalling that it would be interested in being involved in a bid for the Cadbury drinks operation.

India’s Tata group has also signalled an interest in taking a stake in the business.

Cadbury hopes to have a deal tied up by the time of its interim results announcement on August 1.

After the drinks sale is competed, shareholders are expected to receive several billion pounds from the proceeds– either as a special dividend or through a share buyback.

Cadbury is also likely to use some of the proceeds to plug a hole in its pension fund and reduce its £3 billion of debts.

Cadbury last month unveiled drastic plans to boost the profita-bility of the confectionery business that will remain after it has shed its American drinks operation. The company expects to shed more than 7,000 jobs and close up to 11 of its 70 factories worldwide.

Separately, Cadbury will discover this week what penalty the company faces after it pleaded guilty earlier this year to breaching food and hygiene regulations. The case involves salmo-nella poisoning of chocolate last year at its factory in Marlbrook, Herefordshire.

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