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Cadbury shares were moving upwards today as market-makers bet that suitor Kraft will soon make an improved takeover offer for the 185-year-old business.
The stock added 4p to 780p today, heading further away from Kraft's 745p a share, £10.2 billion, informal bid.
That means the City expects an improved deal soon — but also that they think Cadbury management are open to talks at the right level.
A letter from Cadbury chairman Roger Carr to Kraft boss Irene Rosenfeld released yesterday and posted at the stock exchange today gave a strongly-worded rejection of the deal.
Carr said being absorded into Kraft's “low growth, conglomerate business model” was an “unappealing prospect”.
But it clearly left the door open for further talks.
Manoj Ladwa, senior trader at ETX Capital said: “With the current Cadbury's share price well in excess of the bid level, the markets are clearly expecting more from Kraft. With the considerable strategic benefits that Cadbury's offers it probably makes sense for Kraft to continue the hunt.”
Other bidders are expected to enter the fray. In the US, chocolate giant Hershey has enlisted investment bank Perella Weinberg Partners to advise it on its options.
Private equity house KKR could also get involved, perhaps by part funding a bid with either Hershey or Nestlé.
Reader views (3)
Hands off UK plc
- Andrew, Ely UK, 15/09/2009 13:04
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I think they'd be good for each other, as they both make sugery, salty junk food and nothing else.
- Neil, London, London UK, 14/09/2009 14:49
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Lets face it, this deal will be bad for UK Plc.
Many UK small businesses that rely on Cadbury, some 30,000, of them will suffer under the ruthless heal of the Kraft Juggernaut, as it would also with Nestle. Ideally, we need to keep a UK owned manufacturer that is a good business for UK suppliers to deal with. A UK centric manufacturing base does nothing but good for this country.
A Kraft and Nestle takeover will do nothing but harm to the decent people of the UK trying to earn a living.
It must be a good idea in these troubled time to forsake short term gain for longer term wellbeing and gain - my suggestion this is one of the very few good industries that we have left, how about keeping it for our children ?
- James, City of London, 14/09/2009 11:11
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