Sept. 14 (Bloomberg) -- Cadbury Schweppes Plc fell in London trading after the Financial Times said the world's largest candy maker rejected a private-equity bid for its U.S. soft-drinks unit.

The offer of between 6.4 billion pounds ($12.9 billion) and 6.9 billion pounds from Blackstone Group LP, Kohlberg Kravis Roberts & Co. and Lion Capital LLP was turned down last week, the newspaper said. Cadbury executives objected to the terms of the bid, including a proposal under which the London-based confectioner would have financed part of the sale, the FT said.

Cadbury said in March it would sell or spin off the unit, which makes Dr Pepper and 7 Up, to focus on candy. The company delayed the sale in July, citing ``extreme volatility'' in debt markets that increased the difficulty for potential buyers of obtaining financing.

Cadbury shares dropped 7.5 pence, or 1.3 percent, to 580 pence. The stock has declined from a high of 723.75 pence in May, when analysts estimated the soft-drinks unit could fetch as much as 8 billion pounds.

Blackstone and another consortium including TPG Inc. were ready to offer as much as $14 billion for the unit in July, according to people familiar with the situation. TPG was working with Bain Capital LLC and Thomas H. Lee Partners LP.

A Cadbury spokeswoman who wouldn't be named declined to comment on the report.

The confectioner also said today it recalled chocolate bars in the U.K. because they were missing nut-allergy labels. In June 2006, Cadbury withdrew chocolate bars after traces of salmonella were found in some and was fined 1 million pounds by a U.K. court for the contamination.

To contact the reporter on this story: Amy Wilson in London at awilson23@bloomberg.net.

Last Updated: September 14, 2007 11:50 EDT