{"id":190376,"date":"2010-01-16T21:10:00","date_gmt":"2010-01-17T02:10:00","guid":{"rendered":"tag:blogger.com,1999:blog-3087194156628161158.post-350242764569893656"},"modified":"2010-01-16T21:15:53","modified_gmt":"2010-01-17T02:15:53","slug":"scotsman-com-kraft-poised-to-up-cadbury-bid","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/190376","title":{"rendered":"SCOTSMAN.COM: Kraft poised to up Cadbury bid"},"content":{"rendered":"

Published Date: <\/strong> 17 January 2010 <\/p>\n

By Brad Dorfman and Victoria Howley<\/p>\n<\/div>\n

<\/p>\n

KRAFT Foods chief executive Irene Rosenfeld is expected to raise the US company’s $17.1 billion (\u00a310.5bn) bid for Cadbury by its Tuesday deadline although it is likely to fall short of shareholders’ expectations.<\/p>\n

Rosenfeld is forecast to sweeten the offer to 820p a share, from a current offer valued at about 771p, considerably below the 850p level that some investors have signalled they want.<\/p>\n

Rosenfeld is limited in her ability to raise the bid, particularly after a public warning<\/a> by top Kraft shareholder and tycoon Warren Buffett against overpaying. But she is loath to risk coming in too low and facing outright rejection from Cadbury holders, or lose a deal to an eleventh-hour bid by potential rival Hershey.<\/p>\n

The Wall Street Journal reported Hershey has the financial muscle to top Kraft’s offer and is likely to make a bid this week of at least 800p to 820p, or $17.9bn.<\/p>\n

A new bid by Kraft would be the final move in Rosenfeld’s four-month quest for Cadbury, now viewed as a referendum on her tenure at Kraft.<\/p>\n

“Her seat is a lot hotter than it used to be, regardless of whether they get Cadbury bought or not,” Edward Jones analyst Matt Arnold said.<\/p>\n

A New York hedge fund manager said: “If the final offer is worth 800p, I think there is a 50 per cent chance it gets done. At that level it’s the flip of the coin. Every 10p on top is an extra 5 per cent probability that the deal gets done.”<\/p>\n

The investor added that Kraft should include a cushion in its final bid in case its stock falls on concerns over plans to issue up to 370 million shares to fund a deal.<\/p>\n

“If the bid is 830p, I want to be sure it is still worth that much on the day I tender,” he said. Investors have until 2 February to respond to the Kraft bid.<\/p>\n

If Kraft fails to win Cadbury, Rosenfeld will have spent millions of dollars on advisers. She will need to show the company can boost sales and profits without Cadbury and without a growing pizza business whose recent sale was meant to fund a bid.<\/p>\n

DA Davidson analyst Tim Ramey wrote a scathing note to his clients this week suggesting Carlos Gutierrez, a former Kellogg chief executive and US secretary of commerce, might run Kraft instead.<\/p>\n

“Given the high-profile rebuke by No 1 shareholder Warren Buffett last week, we wonder how the board feels about the leadership of Irene Rosenfeld,” Ramey said.<\/p>\n

Rosenfeld went to London last week to listen to Cadbury investors, believed to have included Standard Life and Scottish Widows Investment Partnership, and gauge their sentiment on the bid.<\/p>\n

Share Investor Links<\/span><\/a><\/a><\/p>\n

Share Investor Blog<\/a> – Stockmarket & Business commentary
Share Investor New Zealand Business News<\/a>– Get more business news
Discuss this topic @ Share Investor Forum<\/a> – Register<\/strong><\/strong><\/a> free
Share Investor’s Daily Forex Updates<\/a><\/p>\n

Recommended Amazon Reading<\/span><\/p>\n\n\n\n\n
\"Security<\/a><\/td>\nSecurity Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)<\/a> by Benjamin Graham<\/span>
Buy new: $47.25 \/ Used from: $46.96
Usually ships in 9 to 11 days<\/span><\/td>\n<\/tr>\n
\"The<\/a><\/td>\nThe Four Filters Invention of Warren Buffett and Charlie Munger<\/a> by Bud Labitan<\/span>
Buy new: $33.25 \/ Used from: $43.89
Usually ships in 24 hours<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n