We all know revered hedge fund manager John Paulson has been buying gold this year, but he also appears to have something of a sweet tooth, as this regulatory disclosure released on Tuesday afternoon shows:
Now, Paulson was forced to make this disclosure because he purchased an additional 14.8m Cadbury shares at around 760p on Monday – when, of course, Kraft tabled a hostile offer for Cadbury and the UK chocolate maker batted it right back.
The disclosure is significant because it would appear to show a hedge fund heavyweight betting on an increased offer from Kraft, which despite its protestations desperately needs Cadbury.
It would also appear that short sellers share Paulson’s sentiments, and are betting on an increased offer. According to Data Explorers, the short base in Kraft — a measure how much of its total share pool is on loan — has risen by 45 per cent in the past week. Meanwhile, utilisation — the amount of stock available to borrow that has actually been borrowed — now stands at 4.2 per cent.
Shares in Cadbury closed 2p higher at 763p, while the value of Kraft’s cash and stock offer is currently around 720p.
Related link:
No change in Kraft terms for Cadbury – FT Alphaville
Paulson Doubles Cadbury Stake, Buying as Kraft Disclosed Bid – Bloomberg