{"id":200094,"date":"2010-01-19T06:52:00","date_gmt":"2010-01-19T11:52:00","guid":{"rendered":"tag:blogger.com,1999:blog-3087194156628161158.post-5226453828105386512"},"modified":"2010-01-19T06:54:14","modified_gmt":"2010-01-19T11:54:14","slug":"cnn-money-at-a-glance-cadbury-accepts-raised-bid-from-kraft","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/200094","title":{"rendered":"CNN MONEY: AT A GLANCE: Cadbury Accepts Raised Bid From Kraft"},"content":{"rendered":"

January 19, 2010: 05:48 AM ET<\/p>\n

LONDON<\/location> -(Dow Jones)- Cadbury PLC<\/orgid> (CBY) Tuesday accepted an GBP11.9 billion<\/money> takeover offer from Kraft Foods Inc.<\/orgid> (KFT) of the U.S., a deal that ends a four- month acrimonious battle and nearly 200-years of independence for the U.K.’s largest confectionery company.<\/org><\/org><\/p>\n

THE DEAL: <\/p>\n

Kraft<\/orgid> has agreed to pay 500 pence in cash for each Cadbury share as well as 0.1874 new Kraft<\/orgid> shares for each Cadbury share, up from its original offer of 300 pence in cash and 0.2589 new Kraft<\/orgid> shares. The original hostile bid had been rejected by Cadbury for being “derisory” and had been criticized by some shareholders for offering too little in cash.<\/org><\/org><\/org><\/p>\n

The new offer values Cadbury at GBP11.9 billion<\/money>, compared with the original value of GBP10.2 billion<\/money>. <\/p>\n

THE RATIONALE: <\/p>\n

Kraft<\/orgid> says the takeover, creating a global confectionary giant with more than 40 confectionary brands and annual sales above $100 million<\/money>. will result in ” meaningful” cost savings and revenue synergies.<\/org><\/p>\n

The U.S. company also says the deal gives Cadbury scale, an improved delivery infrastructure, and a leading position in developing markets including Brazil<\/location>, Russia<\/location>, India<\/location>, China<\/location> and Mexico<\/location>.<\/p>\n

WHAT NEXT: <\/p>\n

A rival bidder could emerge for Cadbury, although this now seems unlikely. People close to U.S. chocolate maker Hershey Co.<\/orgid> (HSY), which had been mulling a counterbid for Cadbury, told the Wall Street Journal Monday that Hershey would likely drop out of the running if Cadbury and Kraft<\/orgid> agreed a deal.<\/org><\/org><\/p>\n

Cadbury has also agreed to pay a break fee of GBP117.7 million<\/money> if it ever decides to recommend a competing offer–lessening the chance of a successful Hershey bid.<\/p>\n

The U.K. takeover authorities have set a Jan. 25<\/chron> deadline for Hershey, or Italian chocolate maker Ferrero–which had also been considering its options but is believed to have dropped out–to make final offers. <\/p>\n

THE BACKGROUND: <\/p>\n

Kraft<\/orgid> first went public with an informal cash-and-stock bid for Cadbury on Sep. 7<\/chron>, but Cadbury has consistently rejected its approach, saying the takeover offer was “derisory” and Cadbury’s shareholders shouldn’t swap the company’s growth prospects for Kraft’s<\/orgid> “low-growth, conglomerate” model.<\/org><\/org><\/p>\n

Carr had also been critical of Kraft’s<\/orgid> management, saying they had “a long track record for over-praising and under delivering.”<\/org><\/p>\n

It’s unclear what persuaded Carr and Cadbury Chief Executive Todd Stitzer<\/person> to turn to recommend Kraft’s<\/orgid> new offer, but the U.S. company went a long way to meeting the demands of shareholders, who had requested a higher offer and more cash.<\/org><\/p>\n

Kraft’s<\/orgid> offer should appease Kraft’s<\/orgid> largest shareholder Warren Buffett<\/person>, who warned the company earlier this month against issuing too much new Kraft<\/orgid> stock to pay for a deal. <\/org><\/org><\/org><\/p>\n

WHAT THEY SAID: <\/p>\n

“We are supportive of the (Cadbury) management’s decision although the achieved price is slightly light of our stated target.” – David Cumming<\/person>, head of UK Equities at Standard Life Investments, a Cadbury shareholder with less than 1% of the stock. <\/p>\n

“We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods<\/orgid> has made to our heritage, values and people throughout the world. We will now work with the Kraft Foods’<\/orgid> management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees.” – Kraft Foods Chairman Roger Carr<\/person> <\/org><\/org><\/p>\n

“For Kraft Foods shareholders (the deal) transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline.” – Kraft Foods Chairman and CEO Irene Rosenfeld<\/person>.<\/p>\n

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