Competition from Australia's supermarket duopoly is responsible for Darrell Lea's financial woes, entrepreneur Dick Smith says.
Mr Smith predicts a foreign buyer will swoop on the Australian family owned confectioner and chocolate maker after the 85-year-old business went into administration on Tuesday.
But any new owner of Darrell Lea would not be able to obtain a distribution contract with the major supermarket players, he said.
"Maybe someone can take them over (Darrell Lea) and sack a lot of workers and run the company," Mr Smith said.
"The most likely thing is it will get taken over by someone overseas."
Mr Smith said big Australian businesses were obsessed with growth and squeezing out smaller competitors and Darrell Lea's woes could happen to any medium-sized business.
"Either you get taken over or you go broke, and in the case of Darrell Lea the reason they've got problems is that basically the big supermarkets have taken most of their business," he said.
"In the old days they weren't really selling those Darrell Lea-type products, now you can go into Coles and Woollies and they've got them all there."
Voluntary administrator Mark Robinson, of PPB Advisory, is working on a major review of Darrell Lea's accounts to help understand the extent of its financial problems.
Widespread publicity about the problems of Australia's biggest privately owned chocolate maker has already sparked buying interest from local and international companies.
Also at risk is the fate of the 700 workers employed by Darrell Lea.
Mr Smith ruled himself out as a white knight and instead said billionaire mining magnate Clive Palmer should rescue the company.
"I wouldn't be able to compete with Coles and Woolworths importing from China," Mr Smith said.
"I'm working flat out on Dick Smith Foods ... to get that viable again."
PPB Advisory was unable to confirm claims by the Australian Manufacturers Workers Union that seven international and local buyers were circling Darrell Lea.
The union's food and confectionery division national secretary Jennifer Dowell said she doubted the company would be sold in its current form.
Comment was being sought from Woolworths and Coles.