No change in Kraft terms for Cadbury (UPDATED) | FT Alphaville

No change in Kraft terms for Cadbury (UPDATED)

As widely expected, Kraft has launched its hostile bid for Cadbury, the UK confectioner. And there’s not even a sprinkle of extra paper:


In fact, the statement reads as though Kraft is simply going through the motions: “substantial premium to the unaffected share price of Cadbury”…”attractive multiple,” blah…”no other potential offeror has publicly declared…” etc.

There was some disappointment in London. Having traded as high as 790p in the morning, shares in Cadbury slipped back to 755p at lunchtime in London — a premium of about 6 per cent to Kraft’s begrudging terms.

[UPDATE] Cadbury’s response was less than sweet:

The Offer’s cash price per share and exchange ratio are unchanged from Kraft’s announcement of 7 September. However, due to the fall in the Kraft share price since then, the implied value for each Cadbury share is around 4% lower. Therefore, the Offer is worse than the proposal that the Board has previously rejected as fundamentally undervaluing Cadbury and its prospects.

Accordingly, the Board recommends shareholders reject the Offer and in due course will be communicating with shareholders to set out in more detail why it believes the Offer falls well short of reflecting the value of Cadbury.

Roger Carr, Chairman of Cadbury, said: ‘The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive. As a result, the Board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all.

Related links:
Kradbury: Come on Irene
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Monday’s Markets Live transcript
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