The prospect of an £8bn (€11.7bn) bidding war for the drinks arm of Cadbury Schweppes caused shares in the blue-chip company to surge ahead today.

Confectionery and drinks giant Cadbury Schweppes today looked a step closer to selling its drinks arm as a Canadian firm emerged as a potential bidder for the business.

London shares saw a sharp downturn during afternoon trading after lower-than-expected US retail sales figures led to a tumble in the US markets at the start of the day’s trade.

Shares in Cadbury Schweppes surged today after it emerged an American financier had amassed a 3% stake in the Dairy Milk firm.

A break-up of Cadbury Schweppes was touted in the City today after the company secured greater control over the distribution of drinks such as 7 Up in the United States.

Chocolate maker Cadbury Schweppes today looked set to raise £109m (€156m) following an agreement to sell its South African drinks business Bormor.

Confectionery group Cadbury Schweppes today said it had made a good start to the year despite higher investment and costs.

Cadbury Schweppes has signalled it still faces sticky trading conditions after confectionery sales suffered in the Europe-wide heatwave.

Beverage giant Cadbury Schweppes is paying out more than €140m to turn The Big Apple into the Big Snapple.