{"id":141133,"date":"2010-01-05T13:30:00","date_gmt":"2010-01-05T18:30:00","guid":{"rendered":"tag:blogger.com,1999:blog-3087194156628161158.post-3363459006602680985"},"modified":"2010-01-05T13:33:24","modified_gmt":"2010-01-05T18:33:24","slug":"bbc-news-krafts-cadbury-takeover-plans-dealt-blow","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/141133","title":{"rendered":"BBC NEWS: Kraft’s Cadbury takeover plans dealt blow"},"content":{"rendered":"

\"\"<\/a>Kraft Foods’ plans to buy Cadbury have been hit by news that one of its key shareholders is wary of the bid move.<\/b><\/p>\n

Berkshire Hathaway, the holding firm of US billionaire Warren Buffett, said it had voted against Kraft’s plans to sell new shares to help fund the takeover. <\/p>\n

It said the share sale gave Kraft a blank cheque allowing it to change its offer “in any way it wishes”. <\/p>\n

However, the company said it may change its vote if the final bid “does not destroy value for Kraft shareholders”. <\/p>\n

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BBC business editor Robert Peston said Kraft’s plans to buy Cadbury were now in jeopardy. <\/p>\n

Cadbury shares fell on the news, closing 3.2% lower in London at 779 pence. <\/p>\n

Kraft has until 19 January to announce its final offer for Cadbury. <\/p>\n

Change fears<\/b><\/p>\n

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\"\" Roger Carr, chairman of Cadbury, told me: ‘In essence Kraft’s offer is limited by powerful Kraft shareholders restricting what they can offer’<\/b> \"\" <\/div>\n<\/p><\/div>\n
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Robert Peston, BBC business editor<\/div>\n<\/p><\/div>\n
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Read Robert’s blog in full<\/a> <\/div>\n

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Kraft is planning to issue 370 million new shares in order to help finance its takeover of Cadbury. <\/p>\n

But Berkshire Hathaway – which says it owns 9.4% of Kraft, making it the firm’s largest shareholder – says this plan will allow Kraft to alter its bid however it wishes. <\/p>\n

“And we worry very much that, indeed, there will be an additional change from the revision announced this morning,” the firm said in a statement. <\/p>\n

“To state the matter simply, a shareholder voting ‘yes’ today is authorising a huge transaction without knowing its cost or the means of payment.” <\/p>\n

More cash<\/b><\/p>\n

Earlier on Tuesday, Kraft announced it had sold its North American pizza business – which sells brands including DiGiorno and California Pizza Kitchen in the US and Canada – to Nestle for $3.7bn (\u00a32.3bn).<\/p>\n

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KRAFT BID TIMELINE <\/div>\n
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7 Sept: Kraft tables offer for Cadbury, valuing the company at about \u00a310bn. The bid is immediately rejected by the Cadbury board <\/div>\n
9 Nov: Kraft goes hostile with its takeover bid, and Cadbury again rejects the offer<\/div>\n
4 Dec: Kraft details offer aimed at Cadbury shareholders, setting 5 January deadline<\/div>\n
14 Dec: Cadbury publishes its defence document, urging its shareholders to reject the Kraft offer<\/div>\n
31 Dec: Deadline for shareholders to accept the Kraft bid is extended to 2 February<\/div>\n
5 Jan: Kraft announces revised offer with higher cash proportion<\/div>\n
15 Jan: Deadline for Cadbury to issue trading update <\/div>\n
19 Jan: Deadline for Kraft to publish details of revised offer<\/div>\n
2 Feb: Deadline for Cadbury shareholders to accept Kraft bid<\/div>\n<\/p><\/div>\n
\"\" <\/div>\n
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See Cadbury’s share price<\/a> <\/div>\n

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It said it would use the money raised to increase the proportion of cash in its offer to Cadbury shareholders in order to make its bid more attractive. <\/p>\n

The sale means Kraft will be able to offer an extra 60p per share in cash, though the overall value of the offer is not being increased. <\/p>\n

Kraft’s original bid was \u00a33 plus 0.26 new Kraft shares for each Cadbury share – a deal that analysts said would be unlikely to tempt shareholders. <\/p>\n

The Cadbury board responded by again calling the offer “derisory”. <\/p>\n

“Despite this tinkering, the Kraft offer remains unchanged and derisory with less than half the consideration in cash,” it said in a statement. <\/p>\n

Few rivals<\/b><\/p>\n

In addition to buying Kraft’s pizza business, Nestle also ruled itself out of the running to buy Cadbury. <\/p>\n

Nestle had been linked to a possible offer, and on Monday, that speculation was fuelled when Nestle sold its remaining stake in eye-care group Alcon to Novartis for $28.1bn – a deal perceived as freeing up cash for a Cadbury bid. <\/p>\n

In a statement, Nestle said its decision not to make, or participate in, a formal offer for Cadbury followed discussions with the UK Takeover Panel – the body in charge of regulating takeovers. <\/p>\n

That means Kraft remains the only current bidder for Cadbury, although US confectioner Hershey has previously expressed its interest in a possible bid.<\/p>\n

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