Come on Irene, get your bid price for Cadbury up to 900p

Rosamund Urwin
22 Oct 2009

The credibility of Kraft chief executive Irene Rosenfeld is at risk if the US food giant doesn't win Cadbury.

That's according to Evolution's analysts, who today posted a note entitled "Come on Irene", restating their buy recommendation on Cadbury's shares with a 900p price target.

Evolution says the takeover bid has been carried out so publicly that Rosenfeld can't risk the loss of face of walking away.

Strong third-quarter results from the Dairy Milk maker yesterday have put pressure on Kraft to raise its bid.

Bernstein's analysts also said they reckon £9 will seal the deal, although they added Cadbury is worth a lot more.

But despite the positive sentiment about the takeover bid, the confectionery giant's shares dipped 4½p to 794½p in a weak market as investors booked profits from the recent mega rise.

Shares in London were in for a miserable day as the heavyweight miners dragged the index lower. The FTSE 100 dived 55.97 points to 5201.88 with only nine top stocks staying in the black.

Commodity stocks were hit by Chinese GDP figures, with Fresnillo down 10p to 780p and Lonmin off 15p at 1676p.

Although the Red Dragon produced growth numbers that we could but dream of- 8.9% year on year - investors had been hoping for even better.

Standard Chartered's boffins also said that the market had been spooked by the fact that a huge part of this growth was due to Beijing's huge stimulus package.

Spread-betting firm IG Group suffered amid fears of a Japanese clampdown on one of its main products.

The Asian nation's Financial Services Agency has announced a public consultation on proposals to impose restrictions on so-called contracts for difference, which allow investors to make money on share price fluctuations without splashing out on the shares.

IG, which said only 0.5% of September's revenues were derived from these products, intends to lobby the FSAJ.

Analysts at Panmure Gordon warned it will weigh on sentiment and raises questions about the prospects for IG's Japanese arm.

The stockbroker has cut its price target for the shares from 400p to 385p. They lost 5¼p to 333½p.

Mobile phones giant Vodafone topped the FTSE risers, 2½p stronger at 137½p, after Citigroup said it reckons the market already knows any bad news and added it hopes chief executive Vittorio Colao would up forecasts at its first-half results.

Experian also enjoyed a day in the sun, with a jump of 3p to 567p after Goldman Sachs slapped a buy rating on the credit checking agency's shares.

The City big-hitter's pointyheads predict the worst of the economic crisis is behind Experian and that growth should return to normal levels by 2012. Goldman has upped its price target for the shares from 557p to 670p.

Home Retail Group has found a fan in Nick Bubb, retail expert at Pali International.

He raised his rating on the Homebase and Argos owner from neutral to buy and his price target from 290p to 350p.

He believes that the market has overreacted to the admission that margins will be hit by sterling's weakness and that current company guidance will turn out to be too conservative.

But investors were unnerved after Arcadia owner Sir Philip Green warned of a tough Christmas for the High Street, sending Home Retail Group's shares down 1¾p to 302¾p.

Green's bleak assessment hit the entire retail sector, with Marks & Spencer dropping 6½p to 343p, Kingfisher losing 4½p to 234p and Game Group diving 6p to 151p.

Among mid-caps, investors were lapping up the pub companies in a relief rally after the Office of Fair Trading said that the beer tie can continue, where licensees are forced to buy beer from their pub operators.

But Citigroup warned another challenge hangs over the industry with the Government still needing to respond to the Business and Enterprise Select Committee, which has looked at the fairness of the tie.

It looks like the days when students in London shared a house with mice and damp are ending, but today's scholars may have to pay a hefty price for the privilege of posh accommodation.

Earlier this month, student housing provider Unite Group faced accusations of profiteering when it emerged it was charging £548 a week for a single-bedroom flat in London with no bath.

But analysts at Noble, following a site visit yesterday, believe Unite will deliver another 4500 beds between 2012 and 2014.

They reckon the company is looking cheap and set a 371p price target for the shares, which sank 3¾p to 292½p.